Tds on sales propmotion expense

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Rajesh Rathod (Querist)
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06 January 2012 Whether expense debited under the head Sales Promotion Expense (credited to customer/debtor's account for purchasing targeted level of purchases from the assessee) is liable to TDS?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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07 January 2012 This is a kind of commission and for TDS Section 194H would apply.

Rajesh Rathod

Rajesh Rathod (Querist)
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07 January 2012 But Paras sir it's one type of discount given to customer by the assessee but dr. under the head of Sales Promotion. Please provide me the reference of any reference book or case study (if any) available with u if the same is liable to TDS u/s.194H.

CA. Krishna K Neeraj

CA. Krishna K Neeraj (Expert)
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07 January 2012 Alternatively you can show it as discount in your books.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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07 January 2012 The vendor can sale goods at a lower rate so as to benefit the customer/dealer with the quantum of incentive.

Kerala High Court's case in Vodafone Essar Cellular Ltd.:
Discount retained by distributors of prepaid Sim Cards, recharge coupen etc is liable to TDS U/s 194H as commission.

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