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TDS applicability on HSN/SAC Invoices

8402 views 3 replies

Rohit Joshi

Tax Executive

47 Points Posted on 01 July 2020

Hi team,

if we have purchased material from the vendor & they have mentioned HSN code on the invoice, so there will be no TDS to be deducted on the same as its goods, but if they have also mentioned freight charges or shipping charges on the same invoice & they have also mentioned SAC for the same now so my question is whether TDS is to be deducted on this invoice or not?

Regards
Rohit
9890179508

Replies (3)

Quick Summary

If invoice is for purchase of goods (HSN) with freight/shipping added by vendor, TDS is generally not applicable as it remains a goods contract. SAC shown is only for GST purposes. TDS under 194C applies only when there is a separate service contract for freight.

CA Saloni

Manager-Accounts & GST Consultant

5124 Points Posted on 01 July 2020

For tds to be deducted u/s 194 C you must have a contract with the party related to freight or shipping bill....

Rohit Joshi

Tax Executive

47 Points Posted on 01 July 2020

Vendor is not a service vendor, we are purchasing material from them but they are adding fright charges on that. I asked 1 off CA regarding this & they said that the total cost would be considered as material cost as TDS would not apply on the same.
Please advice

Connectiwity

Reach for expert advice

35 Points Posted on 01 July 2020

Hi Rohit, appears that you are purchasing on FOR basis i.e. goods along with delivery charges. In this case, there would be no need to deduct TDS as it is purely goods procurement. SAC is mentioned on invoice only for GST law purposes.

Hope it helps,
ConnectiWity