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Goods kept in someone godown will be rent or contract

ASHISH RAJNIKANTI RAM TIWARI (ACCOUTANT) (37 Points)

20 March 2014

GOODS KEPT IN SOMEONE'S GODOWN I.E, WAREHOUSING AND EVERY MONTH WE ARE RECEIVING BILL FROM THE PARTY WHO HAS WAREHOUSE. SO MY QUESTION IS THAT WAREHOUSE WILL BE APPLICABLE FOR 10% TDS (194I) OR IT WILL BE CONTRACT AND TDS WILL BE APPICABLE @ 2% (194C). PLEASE LET ME KNOW IMMEDIATELY.

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8 Replies

Supreeth Sharma (CA Final) (113 Points)
Replied 20 March 2014

10% TDS u/s 194I as you have taken the premises on rent for warehousing. It is not a contract and hence TDS cant be u/s 194C

CA SUKSHAM ARORA (CA) (569 Points)
Replied 20 March 2014

according to me, its rent but i am not sure

Sathya Sankeerth K N (Chartered Accountant) (429 Points)
Replied 20 March 2014

I think if the service provided by them is comprehensive where in they take care of the goods as well see to it that they are not spoiled and also release goods directly to your consumers on you sending the bill etc. then it is in the nature of the contract.

If you have only hired the place for storing the goods, then it is under rent.

nayana madwani (article) (21 Points)
Replied 20 March 2014

I think When confusion about tds deduction higher rate of deduction is better. So 10% tds deduction is correct.

amit kumar (Student CA Final ) (123 Points)
Replied 20 March 2014

Agreed with Nayana. As higher Rate of TDS is always prefered in regard of confusion for the safer side

Rakesh Shukla (SR. ACCOUNTANT) (36 Points)
Replied 20 March 2014

As per my view 10% tds to be detected.

(Guest)

According to me, in a contract, bills are not received on a monthly basis whereas in a rental agreement bills are received monthly or on fixed intervals..So, this case should be considered of rent and hence, TDS should be deducted u/s 194I..