TDS ON ADVANCE PAYMENT AGAINST CLEARING & FORWARING SERVICES

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One of the client Imports material from overseas suppliers. To take delivery of imported material, company appoint Clearing & Forwarding Agent to take delivery on their behalf. Some-times, company faces problem to deduct T.D.S. while making advance payment to Clearing & Forwarding Agent on account of Advance Payment, Handling charges, loading-unloading charges, Stamp Duty, Custom Duty, Ware House charges, demurrage charges and Agency Commission etc. As per rule, before release of advance payment, TDS amount is deductable. Though Clearing & Forwarding Agent is working on behalf of company and the said amount is paid by Clearing & Forwarding Agent, on behalf of company to various agencies on account of Handling charges, loading-unloading charges, Stamp Duty, Custom Duty, Ware House charges, demurrage charges etc. etc. My query is that how and on which rate company should deduct tax on advance payment to Clearing & Forwarding Agency for their different services, because this includes advance against expenses, which is reimbursable, and their agency charges.please give me the legal position
Replies (3)
URGENTLY****

Whether TDS is applicable on Demurrahe Payment to Forein Supplier. The contract with Supplier is CNF but Demurage, if any, is on account of Indian Importer (i.e. Buyer).

Ask the C& F Agent to give a separate bill for the reimbursement of expenses.

In this the Agent is acting as a Pure agent, so deduct TDS on the service charges paid to him.

Note that for all the other expenses, he should submit a separate bill.

Demmurages,  i ll check up and let u know.


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