TDS u/s 194C or 194J

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Kinjal B Shah (Querist)
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10 March 2008 Dear All,

We are a limited co.
We have exported goods, for export we have appointed Clearing & Forwarding Agent for transportation of goods to abroad.
This Clearing & Forwarding Agent has issued 2 bills, one for their Service charges (Rs.4,000) & other for Reimbursement of expenses like insurance, transportation expenses (Rs.24,000).
Now the query is whether this service charges should be treated as Professional Fees. ie TDS u/s 194J or it should be treated as Contract charges ie TDS u/s 194C.
If it will be treated as contract charges & then whether TDS is required to be deducted only on Services charges or it should be on both, Service Charges & Reimbursement of expenses.(Party is giving separate bill for reimbursement of expenses.)
Can any one tell me what is general practice which is being followed in this circumstances. Also let me know if there is any Circular, Notification or Case law related to this matter.
If anybody required any other detail, then just let me know.

CA. GOPAL SONIKA

CA. GOPAL SONIKA (Expert)
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10 March 2008 TDS should be U/s 194C.
Secondly since the party has issued different bills no TDS on reimbursement bill.
Had there been a single bill then TDS would have been levied on entire amount as per circulasr 715 dated 1995.

Amit Sharma

Amit Sharma (Expert)
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10 March 2008 As per my knowledge it should be 194J which says TDS on professions should be deducted @ 11.66% on the gross amount.

Kinjal B Shah

Kinjal B Shah (Querist)
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10 March 2008 Dear Mr.Gopal,

Circular 715 is for Section 194J.

R.V.RAO

R.V.RAO (Expert)
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10 March 2008 THIS SERVICE ATTRACTS TDS UNDER SEC 194C BEING CONTRACTED SERVICES BY CFA.
IF THERE IS SEPARATE BILL FOR REIMBURSEMENTS, NO TDS APPLICABLE UNDER CIRCULAR REFERRED BY SRI GOPAL ABOVE.
R.V.RAO

CA. GOPAL SONIKA

CA. GOPAL SONIKA (Expert)
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10 March 2008 No Mr Kinjal B Shah, pl go thru the circular once again. it is for 194C, 194J and 194I.

CA Saurabh Maheshwari

CA Saurabh Maheshwari (Expert)
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10 March 2008 TDS U/S 194C IS TO BE DEDUCTED BUT NOT IN CASE OF REIMBURSEMENT

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