17 February 2014
Our company is a clearing and forwarding agent. We received a bill from container freight station which had import handling charges, storage charges, energy surcharge,weighment charges and service tax.
Is TDS applicable on these payments and under which section?
**Yes, TDS is applicable on certain components, but not on all.**
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### How to Deduct TDS:
1. **TDS Section:**
* Most payments for **services** related to transportation, clearing, forwarding, handling, storage etc., are covered under **Section 194C (Payment to Contractors)**.
* If the charges are for services rendered by the CFS (like handling, storage, weighment), TDS under **Section 194C @1% or 2%** (depending on whether the party is individual/firm or company) applies. 2. **What About Service Tax?**
* **TDS is not deductible on the Service Tax component** of the bill because service tax is a government levy, not income of the CFS. 3. **Which Amount is Considered for TDS?**
* Deduct TDS on the **gross amount excluding Service Tax**.
* For example, if total bill is Rs. 1,00,000 and Service Tax is Rs. 12,000, TDS should be deducted on Rs. 88,000.
* **If CFS is a company**, deduct TDS @ 2%. * **If CFS is an individual/firm**, deduct TDS @ 1%. * Ensure that you have the correct PAN of the CFS for proper TDS credit.
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If you want, I can help you draft an email or TDS certificate format for your vendor. Need help with that?
CAclubindia
