TDS Rate on birth hire charges paid to PORT
This query is : Resolved
28 March 2009
Dear Expers,
Please advice in which rate TDS has to be dedcuted on Birth HIre Charges Paid to Port Aithorities
Regards
Please advice in which rate TDS has to be dedcuted on Birth HIre Charges Paid to Port Aithorities
Regards
28 March 2009
I SUPPOSE IT WILL BE COVERED U/S 194C
Message likes :
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28 March 2009
Any other advice by experts please . . .
28 March 2009
birth hire charges paid to authorities is govt or non govt & you are hiring a birth going from one location to another location your reserved the seat every time in my opinion tds is not deducted because this is contract for traveling not hiring or not periodically contract
28 March 2009
No TDS is deductible.
28 March 2009
Dear Expersts,
In actual Berth Hire Charges is charges for giving space in water to a vessel by port (Status of port is Loacal Authority).
for a certain period or till vessel is loaded.
Please advice again . . .
In actual Berth Hire Charges is charges for giving space in water to a vessel by port (Status of port is Loacal Authority).
for a certain period or till vessel is loaded.
Please advice again . . .
28 July 2025
Thank you for the clarification — it helps narrow down the correct TDS treatment. Let’s break this down based on the **nature of the payment (berth hire charges)**, the **recipient (port authority as a local authority)**, and the **provisions of the Income Tax Act** as applicable in **FY 2008–09** (relevant to your query date: March 2009).
---
## ✅ **What Are Berth Hire Charges?**
* **Berth Hire Charges** are **levied by ports** for allowing a ship/vessel to occupy a **berthing space** at the port.
* It is **rent for the temporary use of port infrastructure** (i.e., the berth — a part of immovable property under water).
---
## 🔍 **TDS Section Applicability:**
### 🧾 Option 1: **Section 194C** – Contracts
* This section applies to **work contracts**.
* Berthing space **is not a work/service contract**, but rather the **use of infrastructure**.
* ✅ **Not applicable** in this case.
### 🧾 Option 2: **Section 194I** – Rent
* Rent under Section 194I includes payment for:
> "use of land, building (including factory building), land appurtenant to a building, machinery, plant, equipment, furniture or fittings..."
🔹 Courts and CBDT have interpreted **“rent” broadly** — covering **use of space for consideration**, even if it's water space (as in berth hire).
### 📌 Therefore, **Section 194I applies** to **berth hire charges** paid to port authorities.
---
## 🧾 Recipient Type: Port Authorities (Local Authorities)
* Port trusts (like Mumbai Port, Kolkata Port, etc.) are usually classified as **‘local authorities’** or **statutory bodies**.
* **TDS is still applicable**, even if the payee is a local authority, **unless the income is fully exempt** under Section 10 — which must be specifically notified.
⚠️ **TDS is generally deductible unless a specific exemption is notified for that authority.**
---
## ✅ **Applicable TDS Rate (FY 2008–09):**
| Section | Nature of Payment | Rate | Cess | Effective Rate |
| -------- | ---------------------------------- | ------- | ----- | -------------- |
| **194I** | Rent for use of space (berth hire) | **10%** | 0.30% | **10.3%** |
(Note: 10% + 3% education + SHE cess on TDS)
---
## ✅ **Conclusion:**
* **Berth Hire Charges paid to a Port Authority** fall under **Section 194I (Rent)**
* **TDS Rate (FY 2008–09):** **10.3%**
* TDS **is required to be deducted** unless:
* The Port Authority is **exempt under Section 10(20)** or any notification
* A **no-deduction certificate** is furnished by the authority (under Section 197)
---
## 📌 Recommendation:
* Deduct TDS **u/s 194I @ 10.3%** on berth hire charges
* Ask for an **exemption certificate or PAN** from the Port Authority if they claim TDS shouldn't be deducted
Let me know if you want to check whether a specific Port Trust was exempt in FY 2008–09.
---
## ✅ **What Are Berth Hire Charges?**
* **Berth Hire Charges** are **levied by ports** for allowing a ship/vessel to occupy a **berthing space** at the port.
* It is **rent for the temporary use of port infrastructure** (i.e., the berth — a part of immovable property under water).
---
## 🔍 **TDS Section Applicability:**
### 🧾 Option 1: **Section 194C** – Contracts
* This section applies to **work contracts**.
* Berthing space **is not a work/service contract**, but rather the **use of infrastructure**.
* ✅ **Not applicable** in this case.
### 🧾 Option 2: **Section 194I** – Rent
* Rent under Section 194I includes payment for:
> "use of land, building (including factory building), land appurtenant to a building, machinery, plant, equipment, furniture or fittings..."
🔹 Courts and CBDT have interpreted **“rent” broadly** — covering **use of space for consideration**, even if it's water space (as in berth hire).
### 📌 Therefore, **Section 194I applies** to **berth hire charges** paid to port authorities.
---
## 🧾 Recipient Type: Port Authorities (Local Authorities)
* Port trusts (like Mumbai Port, Kolkata Port, etc.) are usually classified as **‘local authorities’** or **statutory bodies**.
* **TDS is still applicable**, even if the payee is a local authority, **unless the income is fully exempt** under Section 10 — which must be specifically notified.
⚠️ **TDS is generally deductible unless a specific exemption is notified for that authority.**
---
## ✅ **Applicable TDS Rate (FY 2008–09):**
| Section | Nature of Payment | Rate | Cess | Effective Rate |
| -------- | ---------------------------------- | ------- | ----- | -------------- |
| **194I** | Rent for use of space (berth hire) | **10%** | 0.30% | **10.3%** |
(Note: 10% + 3% education + SHE cess on TDS)
---
## ✅ **Conclusion:**
* **Berth Hire Charges paid to a Port Authority** fall under **Section 194I (Rent)**
* **TDS Rate (FY 2008–09):** **10.3%**
* TDS **is required to be deducted** unless:
* The Port Authority is **exempt under Section 10(20)** or any notification
* A **no-deduction certificate** is furnished by the authority (under Section 197)
---
## 📌 Recommendation:
* Deduct TDS **u/s 194I @ 10.3%** on berth hire charges
* Ask for an **exemption certificate or PAN** from the Port Authority if they claim TDS shouldn't be deducted
Let me know if you want to check whether a specific Port Trust was exempt in FY 2008–09.
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