27 March 2009
Earlier I not get solution of this so after long time again i presenting my query. I am Custom House Agent. Per contract my commission is Rs.3500/- fixed for which i raising bill and tds deducted by client is @ 11.33%. Now i have to paid some dues on behalf of clients. e.g. Custom duty 500000/- + Govt Stamp duty 10000/- + Port Charges 10000/- + Foreign Shipping Charge 10000/- total : 530000/- paying on behalf of client for which we are raising separate debit note alongwith evidences/bills/receipts of the above pymnt we made on behalf of them and paying this after applicable TDS. But again our clients deducts tax at source on this debit note amt @ 2.266% on 530000/- which we paid on behalf of them only as frontman or mediater between to concern. in this debit note amt no income/profit factor affects to us. But TDS deducted by our client 12000/-. Now our income is only 3000/- on which net profit is only 1000/- and on which my tax liability is comes only for 337/- but TDS is 340/- + 12000/-. since last 3 years tds is more than net profit. NEITHER CLIENTS MADE THE ABOVE PYMT DRECITLY NOR THEY MAKING PYMT WITHOUT TDS SAYING AS PER CIRCULAR WHICH SAYS ANY SUM PAID TO CONTRACT IS SUBJECT TO TDS.
Pls. help me is there any clarification/circular/notification or case law which we present to our clinets to say please do not deduct TDS from debit note for which we paid purely dues on behalf of them.
27 March 2009
I dont know exactly the circuler but it is not covered by any section under TDS. You are making payment on behalf of company so it is non other then making payment by company itself. Suppose if company would have paid the same then there would not have any Q of TDS. So indirectly it should not be liable to TDS. Also ask your comapny under which section they are deducting the TDS.
27 March 2009
TDS is always deductible as you are making payment and claiming the same from the client. In any case you can claim refund. If you wan them not to deduct TDS from your payment as your income is less you can approach your Assessing Officer and show your Income and expenses. And the Assessing officer can provide you a letter where he will mention a lower rate of TDS or payment without TDS.
But for each payment to you TDS has to be deducted else the client cant claim the expenses.
the amt. we claiming from our client is govt. duty and port charge and foreign shipping co. charge. there is no question of tds on govt. dues and pymet to foreign shipping co. and on port charges we are making pymt to port after deducting applicable tds. TDS occurs twice.
the matter was also discussed with our Chief Commissioner of IT, Rajkot in seminar of chamber of commerece and they also told that the tds should NOT BE deducted on the amt claiming from clients as said above.
However there is no any written clarification in this regard there is no escape for us. and today on 31 Mar 2009 our tds gone to double of our net profit.
CAclubindia
