tax deducted at source

I have a problem regarding levy of TDS in the following matter:

M/s. X Partnership firm, an Importer of Iron & Steel, has imported Zincc lot from abroad.

The Supplier of goods has made an arrangement with m/s X and issued a Bill as follows:

BILL

ZINC                                                                                         $ 10,00,000 

Add: Interest (As Buyer's Credit for 90 Days)                   $       20,000

                                                         T    O    T    A    L             $ 10,20,000

1.     Whether the above Interest is liable to Tax Deduction at source?

2.     If Yes at what percentage?

3.     Whether the above interest is considered as part of Purchase cost?

        Please Answer the above Query as soon as possible.........

Replies (3)
Originally posted by : RAJEEV

I have a problem regarding levy of TDS in the following matter:

M/s. X Partnership firm, an Importer of Iron & Steel, has imported Zincc lot from abroad.

The Supplier of goods has made an arrangement with m/s X and issued a Bill as follows:

BILL

ZINC                                                                                         $ 10,00,000 

Add: Interest (As Buyer's Credit for 90 Days)                   $       20,000

                                                         T    O    T    A    L             $ 10,20,000

1.     Whether the above Interest is liable to Tax Deduction at source?

2.     If Yes at what percentage?

3.     Whether the above interest is considered as part of Purchase cost?

        Please Answer the above Query as soon as possible.........

usually such interest is capitalized in purchase cost, also customs take the gross amount in valuations. so TDS is inapplicable. 

Thanx Mr. Sharma???????

But HDFC Bank Demand amount of TDS on such amount(Interest) transferred on behalf of entity to supplier after 90 days.

What should we do??????

is the interest part paid to HDFC bank ? if yes then your query is wrong, if NO then HDFC bank has not authority over it, except clearence of payment. 

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