TDS remittance on provisions made

This query is : Resolved

anand (Querist)
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01 December 2009 One of our client has engaged the transporter to dispatch goods to customers and has not received bills from the transporter for the services from april to november and client has made General Provision for this service valuing of Rs.3.5 lacs(Actual bill would come even more or less). so please clarify me whether this client has to make tds payment from the provision made and remit the same to the government.

GSTP Hari Dhayalan Konar

GSTP Hari Dhayalan Konar (Expert)
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01 December 2009 upto 30th of september have to account tds provision and should pay to government. after 1.10.2009 no need to deduct TDS for payment to Goods Transporter.

CA SANJAY MUKHERJEE

CA SANJAY MUKHERJEE (Expert)
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01 December 2009 I feel the expenses are not credited to the transporter as the bills are not received and TDS need not to be deposited on that. On receipt of the bills the provision entry will be reversed and will be credited to the contractors and then the liability will arise for TDS.

However if the bills are received after the end of financial year and TDS not deposited within due time then the expenses will be disallowed for Income tax purpose.

Murtaza I Bhagat

Murtaza I Bhagat (Expert)
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01 December 2009 agree with Expert Sanjay

Krishan Aggarwal

Krishan Aggarwal (Expert)
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01 December 2009 Sorry to say, but i have a different opinion. As, we all are aware, The New T.D.S rate is applicable from 01.10.2009, where T.D.S. is not to be deducted from Transport contractor. But if the bill pertains for the period prior to this then we have to deduct T.D.S from these bill and should be deposited.

This is also for safer side. Otherwise later on some notification or circular on this issue, clarifying that T.D.S. have to deducted in these cases, then it would attract Interest for late depositing the T.D.S. or disalowance the expenditur on the basis of non deduction of T.D.S.

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