TDS u/s 194C

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This query is : Resolved

Prashant Nayak (Querist)

18 September 2009 Dear Sir,

Suppose a supplier has added freight in his sale bill and deducted TDS while paying the freight to transporter. Then shall we deduct TDS on reimbursement of such freight amount?

Shyam Lal Naik

Shyam Lal Naik (Expert)

18 September 2009 The contract between you and your supplier is contract for purchase and sale. It is not a contract for carrying out any work.

No TDS

CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)

18 September 2009 Tax at Source is not deductible.

Prashant Nayak

Prashant Nayak (Querist)

18 September 2009 Sir, in this case we are claiming the freight as expenses (included in purchases) not the supplier. Thus how will we assure that the supplier has deducted TDS on such freight payment to transporter?

Shyam Lal Naik

Shyam Lal Naik (Expert)

18 September 2009 The two facts : 1) Supplier has included the freight in the sale bill and 2) making payment to the transporter(you are reimbursing the same to the supplier) establishes that the transport contract is between your supplier and the transporter. The responsibility of TDS deduction is on your supplier. You have no obligation to find whether the supplier has deducted the TDS or not.

Late CA Sampat Jain

Late CA Sampat Jain (Expert)

18 September 2009 TDS u/s 194C is made by person crediting or paying the contractor=trasnporter ....since it is supplier doing so he has to deduct tds and he is liable

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