The Company has a Distributor in Ahmedabad. Distributor has more than 200 Dealers. The Company sells to Distributors and Distributors in turn sells to Dealers. The Company in consultation with Distributor designed a Silver Coin Scheme for Dealers. The Silver coins are purchased by Company in its books and thereafter distributed to all the Dealers, who have achieved the Target under the Scheme. In this case, 1) Please confirm whether Section 194R is attracted or not? 2) What should be TDS obligation of Company? 3) From whom the Company should deduct TDS either from Distributor or Dealer? 4) Company does not have direct dealings with Dealer in that case, what it should do for TDS Obligation and Deducting from whom? 5) Which is the Key Reason for Attracting TDS Liability on the Company?
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Section 194R Applicability for Silver Coins to Dealers
Yes, TDS should be deducted from distributor/s accounts, as the company is distributing it (to dealers) through distributors.
1) Yes, TDS u/s 194R @ 10% will be deducted as the company is providing benefits in kind during the course of business to the dealers provided the value of coins is more than Rs. 20,000/- in a financial year.
2) If the coins will be sent to the distributors then TDS will be deducted from the distributors and if the coin will be send directly to the dealers then the TDS will be deducted from dealers.
In case of any further queries, kindly mail me at casoravgupta @ gmail.com
Thanks & Regards
CA. Sorav Gupta
(Practicing Chartered Accountant)
Please refer this video
https://youtu.be/Op1JugLN_x8
Please refer this video
https://youtu.be/Op1JugLN_x8
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