Payments to airlines/travel agents - The provisions of section 194C do not apply to the payments made to the airlines or the travel agents for purchase of tickets for air travel of individuals. The provisions shall however apply when payments are made for chartering an aircraft for carriage of passengers or goods. This clarification will apply mutatis mutan dis to the tickets for travel of individual by any other mode of transport also—Circular : No. 713, dated 2-8-1995.
It deals with cases where payments are made to shipping agents of non-resident ship-owners or charterers for carriage of passengers, etc., shipped at a port in India. Since the agent acts on behalf of the non-resident ship-owner or charterer, he steps into the shoes of the principal. Accordingly, the provisions of section 172 shall apply and those of sections 194C and 195 will not apply.
Where the freight paid to a Resident Indian Party (Who is not acting as an agent of Non-Resident) TDS will be required to be deducted.
15 February 2015
http://incometaxindiapr.gov.in/incometaxindiacr/contents/CBDTFiles/Circulars/CBDTLaws/HTMLFiles/sec194c_713_95.htm
Link of Circular 713 is given above.
Sir 2nd line of the circular is for payments to travel agents or the airlines for purchase of tickets for travel by air. No where exemption is mentioned for Ocean Freight paid to Resident Ship Owner.
16 February 2015
Sir you are most welcome. It is an honour to be in company of expert like you. I have always learnt alot from you and you have corrected me many times.
It is high time other experts start learning from you to reply only to add value and be humble in accepting any mistakes rather than modifying the earlier reply.
Sir please do keep sharing your immense knowledge with all of us.
CAclubindia
