Whether tds has been deducted or not ??
Querist : Anonymous
My client is subsidairy of nationalised bank, has made monthly payment to Post office for courier charges. Post office has issued bill with service tax.
Whether TDS has been applicable or not in this case U/s 194C.
They regularly deducted TDS in case of Blue Dart ( Courier ).
Querist : Anonymous
And nationalised bank subsidiary( i.e. BOB )is also govt. bank.
Can you give me the reason so that i can discuss further on it wit the client.amount involvement is very high...
Pls reply
Querist : Anonymous
Querist : Anonymous
Key Points:
Section 194C of the Income Tax Act mandates deduction of TDS on payments to contractors/sub-contractors for carrying out any work (including supply of labor for carrying out work).
Courier services fall under the category of "transport of goods," which is considered a "work" under 194C.
Therefore, payments made to courier service providers are subject to TDS deduction under section 194C.
About Post Office and Government Undertakings:
Although Post Office is a government undertaking and your client is a subsidiary of a nationalised bank, Section 194C applies irrespective of the status of the service provider unless specifically exempted.
The Income Tax Act does not exempt government undertakings from TDS deduction under Section 194C on such payments.
The only exemptions are certain payments to government or local authorities under specific provisions (e.g., rent paid to government is exempt under 194-I).
Supporting points:
Section 194C applies to all payments for transport of goods including courier charges, to any person (government or private).
The service provider (Post Office) issuing bill with service tax confirms it's a commercial service.
TDS deduction protects the payer from future tax issues and ensures tax compliance.
The practice of deducting TDS on Blue Dart (another courier service) is correct and consistent with tax laws.
The CBDT circulars and ITAT rulings also support deduction of TDS on courier charges regardless of the service provider's government status.
Summary for client:
TDS deduction under Section 194C is applicable on courier charges paid to Post Office.
No specific exemption for government undertakings in this case.
Deducting TDS safeguards your company from penalty and interest for non-deduction.
You should continue deducting TDS even if the payee is a government entity.
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