TDS on reimbursement of air cargo charges

This query is : Resolved 

23 January 2011 One of my client had reimbursed air cargo charges for the air lifting of air cargo to the agent of the air line. The payment is initially made to the airline by the agent and based on the airway bill produced, the amount of the airway bill is reimbursed. No service charges or additinal payemnt is made nor they raise any bill on the client. It is understood that the agent is not doing any activity except the collection of money and based on the amount collected/bookings obtained through them they get commission from the airline. While making payment by the agent to the airline tax is deducted at source. Is my client liable to deduct tax at source under section 194C from the reimbursement of money to the agent of the airline? Please favour me with your valuable advice.

24 January 2011 Deduction of TDs u/s 194C will not apply in this case.

24 January 2011 Kindly enlighten with the reasons for concluding that section 194C is not attracted.


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