TDS ON LICENCE FEE

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This discussion explores whether Tax Deducted at Source (TDS) is applicable on a licence fee payment. An assessee received ₹8 lakh as licence fee from small milk vendors on behalf of a company and subsequently paid the same amount back to the company. The core question is whether TDS is required on this payment, especially since the assessee's business is subject to audit and has a significant turnover. The consensus leans towards TDS not being applicable in this specific instance as the collected amount was directly paid to the company.

JYOTI GOEL

JYOTI GOEL (Querist)
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05 February 2022 ASSESSEE RECEIVED RS. 8 LAC LICENCE FEE FROM SMALL MILK VENDERS(GST NOT APPLICABLE ON SALE OF MILK ) ON BEHALF OF COMPANY AS LICENCE FEE AND PAID RS. 8 LAC BACK TO COMPANY AS LICENCE FEE. WHETHER TDS APPLICABLE ON PAYMENT OF LICENCE FEE TO COMPANY (WHICH IS RECEIVED ON BEHALF OF COMPANY ITSELF). ASSESSEE BOOKS ARE SUBJECT TO AUDIT AND IS WHOLESALER OF MILK, TURNOVER 7 CRORE. ALL THE VENDORS ARE SELLING MILK OF THE SAME COMPANY.