Tds on e-auction

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VIJAY BHATT (Querist)
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10 September 2015 Is TDS will be deducted on E-Auction charges. (Party raised bill for e-auction for disposal of scrap material)???

Party also charges Service Tax

If TDS deducted then under which Section ??? 94C or 94J ???

VIJAY BHATT

VIJAY BHATT (Querist)
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04 October 2015 Why there is not a single response from Experts ???????????????????? since after so many days

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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27 July 2025 When it comes to **e-auction charges** for the disposal of scrap material, TDS applicability depends on the nature of the services being provided. Since **e-auction charges** are a type of **service fee**, let's break down the TDS deduction and the applicable sections.

### **TDS on E-Auction Charges**

1. **Nature of the Payment**:

* In this case, the payment is made for **e-auction services**, which typically include facilitating the auction process, handling bids, and managing the auction platform. This would fall under **professional or technical services**, depending on the agreement.

2. **TDS Deduction**:

* If the party raising the bill for e-auction services is **providing a service** (not goods), TDS is applicable on the **service charge**.

3. **Applicable Section**:

* Since **e-auction** involves services (possibly technology and management of the auction platform), the TDS is generally deducted under **Section 194J** for **fees for professional or technical services**.

### **Why Section 194J?**

* **Section 194J** applies to **fees for professional or technical services**, and e-auction services typically involve technical or professional skills, such as platform management, coordination of auction activities, and other related services.

### **TDS Rate Under Section 194J**:

* **TDS rate is 10%** on the payment for such services, if the payee is an individual, HUF, or a company (or other entities).
* Additionally, **Service Tax** is charged separately by the party providing e-auction services, but TDS is based only on the **service fee** (before Service Tax).

### **If Section 194C (Contract) Applies?**

* **Section 194C** is related to **work contracts** for the **execution of works**, and is usually applicable when there is a contract for the supply of goods or execution of work. Since e-auction is a **service**, **Section 194J** is the correct section for TDS.

### **Example**:

* **Scenario**: You’re paying **₹50,000** for e-auction charges (excluding Service Tax).

* TDS under **Section 194J** at 10% would be **₹5,000**.
* You would then **deduct ₹5,000** and remit it to the government, while paying the vendor **₹45,000**.
* The party would charge **Service Tax** (on ₹50,000), which is separate from the TDS amount.

### **Conclusion**:

* **TDS on e-auction charges** is to be deducted under **Section 194J** (fees for professional or technical services) at the rate of **10%**.
* **Service Tax** is charged separately by the service provider and does not affect the TDS calculation.

Let me know if you need further clarification on this or any other related queries!

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