TDS on Transport payment

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Varsha Jain (Querist)
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23 January 2008 DEAR ALL,

Mr.A purchase goods from Mr.B.Mr.B makes transport payment to transporter.WHAT ABOUT TDS LIABILITY on Mr.A who reimburses the amount to Mr.B. Mr.A will claim this frieght as an expenditure in his P&L A/c.(will Frieght be disallowed on a/c of non deduction of TDS) Will it make any difference if the frieght amount is inclusive in the bill.

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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23 January 2008 If B recovers exact amount of transport cost from A, enclosing the copy of the bill raised by the transporter, and if B has paid the same amount to the transporter deducting tax at source, no liability to A to deduct tax on the transport charges.

If the freight amount is inclusive of Bill, then the goods are sold by B at C & F basis to A and the question of TDS does not arise.

The query has already ben answered

Garima

Garima (Expert)
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01 February 2008 Payment of Freight would be subject to Tax deduction even when goods are received on "freight to pay basis" as per Circular No. 715 dated 8/8/1995.

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