1. Can we deduct TDS@20% u/s 195 on the freight charges charged ag. Invoice/Debit Note by the Foreign Company and pay the net amout.
or
2. Shall we Gross up the TAX component for the Freight charges and pay the same amount what is stated in the Invoice/Debit Note by the Foreign Company instead of deducting the TAX.
If there is any case-law regarding this please provide it.
06 May 2012
That depends on the agreement between the two parties ,normally the first route is adopted as the foreign party can get claim of tax deducted in India.
CAclubindia
