Tds on payment to clearing & forwarding agents

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This query is : Resolved

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TDS on payments to clearing and forwarding agents applies under Section 194C at 1 percent or 2 percent. Reimbursement of expenses like ocean freight and port charges may not attract TDS if supported by proper bills.

Aadish Jain

Aadish Jain (Querist)
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30 January 2013 A Pvt. Ltd. logistics co.(x) provides services to a ltd. co.(y) and raised a bill as under
1. Non Manipulation certificate Charges
2. Ocean Freight
3. Bill of lading charges
4. Terminal handling charges
5. Storage Charges
and charged service tax on these services I want to know that is the Ltd co.(y)is liable to deduct TDS and if yes than under which section.
plz suggest with clarification

SANJAY TALATI

SANJAY TALATI (Expert)
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30 January 2013 In case of the clearing and forwarding Agent, the applicable TDS provision is Sec. 194 C i.e 2 % in case the CHA is a Company or Partnership Firm else 1%.

From your querry it appears that the CHA has charges Ocean freight , Bill of Lading charges and Terminal Handling charges by availing the services from the different agencies and they themselves must not have provided these services. Hence, these expenses will be in the nature of the reimbursement of expenses and hence no tds should be deducted. On the balance amt. deduct tds @2%.

Ensure to take from the CHA the copy of the bills for availing these services on your behalf.

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