Tds on ocean freight

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Querist : Anonymous

Querist : Anonymous (Querist)

17 November 2012 A company is getting goods imported and for this he pays ocean freight to an Indian Company. Is TDS on the same applicable irrespective of the fact that PAN is available. Please suggest.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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17 November 2012 Generally TDS provisions does not apply. For details refer CBDT Circular 713 reported in 215 ITR (St) 4.

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Querist : Anonymous

Querist : Anonymous (Querist)

17 November 2012 Thanks Sir. I had gone through this circular but I think that this circular refers to TDS on tickets sold by airlines and travel agents to customers. I had also gone through Sec 172 which states that there would be no TDS on ocean freight paid to a foreign shipping company orits agent. But in the present case, I need to know about TDS on ocean freight paid to an Indian company when its PAN is available. In this case the loading port is of a foreign company and goods are imported through an Indian shipping company. In such a case what would be the liability of TDS on ocean freight paid to an Indian company. Please guide in the matter.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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17 November 2012 PAN related TDS issue (section 194C) is for "goods carriage". But ship is not a goods carriage , for TDS provision, as per explanation (ii) to section 194C read along with section 2(14)/(28)of the Motor Vehicles Act,1988.
Therefore ,the recourse is the circular referred by me, the relevant portion of which reads as follows:-

"The provisions shall, however, apply when payments are made for chartering an aircraft/ any other mode of transport for carriage of passengers or goods."

Presuming that,the ship is not chartered, I used the word 'generally' in my first observation.

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