COST & INCOME ADJUSTMENT

A courier company hiring transporter & they are fixing their GPS on vehicle & while making their freight payment they are adjusting their GPS rent against freight payment. can this amount be adjusted against freight or should be reported separately freight expenses & GPS income.  what will be TDS implications.

 

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Quick Summary
This discussion explores whether a courier company can adjust GPS rental costs against freight payments or if they should be treated as separate expenses and income. It delves into the TDS implications of such adjustments and clarifies that GPS is an expense for the courier company, with income generated by mobile carriers. The advice suggests that if no commission is involved, the GPS cost can be adjusted against transport expenses with a note, provided there are no adverse tax consequences.

GPS is an expense as well. Only, mobile carriers will get income from GPS gadgets and not the courier company. The depreciation charges are also borne by the courier company. So it will be like his:

Depreciation a/c

To GPS gadget asset a/c

Freight charges a/c

To Bank a/c

GPS is an expense as well. Only, mobile carriers will get income from GPS gadgets and not the courier company. The depreciation charges are also borne by the courier company. So it will be like his:

Depreciation a/c

To GPS gadget asset a/c

Freight charges a/c

To Bank a/c

Courier company took on rent from the telecom company & further they fitted it on transporter vehicle & charging rent from them.

Your paying service tax to telecom company on every renewal. You will have to enter it in your accounts. Then, then company has an agent relationship. It is renting and leasing it to someone. If Commission is involved, show it as income, and if no Commission is involved, then just expense it because your not getting any profit+ your paying rent. You can adjust against transport expense and make a note. THis will at least reduce one entry in the books not unless it has any tax consequences.

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