TDS Deduction on re-imbirsement charges


Leena (accounts assistant)     14 October 2019

Leena
accounts assistant 
 25 points

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A is a clearing agent and B is their party. A makes a payment to C(shipping line / forwarder/3rd party) for freight charges on behalf of B. A also bills the same amount without GST to B as reimbursement for Freight charges. At the time of payment, TDS is deducted on the amount when B pays the re reimbursement to A.

Is this right ? Because these are reimbursement charges which the clearing agent has paid on behalf of the Consignee. 

 

avater

CA Dhruva Kalamanji (Chartered Accountant )     14 October 2019

CA Dhruva Kalamanji
Chartered Accountant  
 84 likes  1824 points

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If the transaction carried is under pure agent principle then no TDS have to check for agreement between a and b

Thank you
You can also write to meĀ  at sthayin @ gmail for further assistance


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