Tds on commission

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

27 September 2015 Dear All,

A Ltd sells the product through B Ltd on its website for Rs 200 per unit (B ltd is a E-commerce company). B ltd remitts to the A ltd of Rs 150/- per unit only on sale . Balance Rs 50/- per unit is considered as commission as per agreement . Whether A ltd has to deduct TDS on the same? Pls help me with the provision.

ANKIT AGARWAL

ANKIT AGARWAL (Expert)

27 September 2015 Practically If you have Collected VAT/CST on Rs. 200, It would be treated as Sale and Rs. 50 is Selling expenses. Non compliance to TDS may lead to disallowance of this Rs. 50 during Assessment.

But if VAT has been Paid on Rs. 150, You may record Your Sale price as RS. 150 in accounting instead of Rs. 200 and hence avoid recording Rs. 50 as Commission in Books.

Your Query relates to substance over form question rather than any agreement.

Querist : Anonymous

Querist : Anonymous (Querist)

27 September 2015 Thanks for your reply.

Invoice includes VAT or CST as applicable, but do not include commission in the invoice. On every sale the remiiter will withold the commission and remits the balance.

My query is since he witholds the commission as his income and pays the balance . So i have to the expense as Commission. Should I have to deduct TDS.

ANKIT AGARWAL

ANKIT AGARWAL (Expert)

27 September 2015 YES TDS IS APPLICABLE IN YOUR CASE

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