TDS on Clearing and forwarding Agent

if u have to post the itemized bill in your accounts in itemized manner viz commission posted to commission , godown rent posted to godown rent , telephone exp posted to telephone exp and etc posted to your respective head, then u have to treat the accounts separately and apply TDS provisions headwise, 

but if your accounts post the whole invoice in carrige inward/outward or clearing and forwarding, then whole amount is subjected to TDS.

Originally posted by : Jaswanth Adapa
	Hello All !!! One of my client gets a consolidated Bill from Clearing & forwarding agent towards: Fixed Commission  - ----- XXXX Godown rent   ----- XXXX Telephone expenses ----- XXX etc ------ XXXXX Total      ----- XXXXXX My question now is whether to deduct TDS under sec 194H only on the Fixed Commission part or on the Total Bill amount? Breakup for the above kinds of expenses incurred by the C&F agent is also mentioned in the agreement. But, do we need to deduct TDS on the bill amount or only on the fixed commission amount???? Plz give ur answers with justifications !!!! Thanks in advance.

It is advisable to account the head wise different nature of expenses and apply TDS accordingly. If the agreement is commission plus reimbursement of other allied expenses then TDS u/s 194 H would be applicable only on Fixed Commission amount.

Reimbursement of Expencess is not subject to TDS if it is shown seperatly in Invoice raised

Regards

Madhusudan

Thank you all.

Added to that, I have a query.

Say, if the client had got a consolidated bill amount, Rs. XXXX, without break-up of expenses (the bill amount is inclusive of fixed commission, godown rent, telephone expenses, etc.., as per the C&F agreeement),

On wat amount is the TDS to be deducted ???

Originally posted by : Jaswanth Adapa
	Thank you all. Added to that, I have a query. Say, if the client had got a consolidated bill amount, Rs. XXXX, without break-up of expenses (the bill amount is inclusive of fixed commission, godown rent, telephone expenses, etc.., as per the C&F agreeement), On wat amount is the TDS to be deducted ???

One has to substantiate the claim of difference between Fixed commission and reimbursement of expenses. If in the contract it is mentioned that commission is inclusive of the Godown Rent, tellephone expenses etc. in that situation TDS on the entire amount would be deducted.

agreed with Khan sir......

Regards

Madhusudan

I don't agree with Madhusadan Kabra,

As per my knowledge goes if a bill contains both actual amount and the amount of reimbursement also even if it shown seperately in the same invoice.

TDS has to be deducted on the Gross amount of the bill.

For claiming reimbursement, one should use a seperate invoice always.

Pls follow V K Singhania's book, there it is clearly mentioned

Regards,

Rahul

Reimbursement is the expenses done on behalf of the client, and if TDS was applicable on such expenses then the agent had to withhold the TDS amount from such expenses, and initiate the client to issue TDS certificate to the party. 

The client had to book the expenses under appropriate accounting heads after TDS.

Mere saying that reimbursement of expenses does not attract TDS, is wrong, reimbursement is a term which is used for "out of pocket expenses" not for all .

say we hire a CA to deal with a case, where CA has to visit the office and several places in course of case, he bills for his fees ( TDS applicable) and ask for reimbursement of "tax paid" on behalf of client. ten TDS is not applicable on TAX paid, 

if he ask for reimbursement of stationary used./ forms purchased/ stamp duty etc then the client has to book these in appropriate heads,

but if the CA bils for lodging charges and resturent bills as reimbursement expenses, then either company has to take the original bills to account in their business promotion, or deduct the TDS on whole amount including lodging and resturent. as the head of account for such payment is "payment to auditor" 

Originally posted by : U S Sharma
	Reimbursement is the expenses done on behalf of the client, and if TDS was applicable on such expenses then the agent had to withhold the TDS amount from such expenses, and initiate the client to issue TDS certificate to the party.  The client had to book the expenses under appropriate accounting heads after TDS.   Mere saying that reimbursement of expenses does not attract TDS, is wrong, reimbursement is a term which is used for "out of pocket expenses" not for all .   say we hire a CA to deal with a case, where CA has to visit the office and several places in course of case, he bills for his fees ( TDS applicable) and ask for reimbursement of "tax paid" on behalf of client. ten TDS is not applicable on TAX paid,  if he ask for reimbursement of stationary used./ forms purchased/ stamp duty etc then the client has to book these in appropriate heads,   but if the CA bils for lodging charges and resturent bills as reimbursement expenses, then either company has to take the original bills to account in their business promotion, or deduct the TDS on whole amount including lodging and resturent. as the head of account for such payment is "payment to auditor"

"Payment to Auditor" can be further bifurcated in "Audit Fee" and "Out of Pocket expenses". TDS would be applicable only for Audit Fee and will not be applied on out of pocket expenses which has been claimed by auditor on actual basis with the supporting evidence..

In my view it is not the account head that impact on the applicablity of TDS rather it is the relationship between payer and payee.

For eg.  Mr. A the C&F agent of Principle Manfuacrurer M/s X has got a Godwn on Rent from Mr. B. There is agreement between Mr. A and M/s X that godown Rent would be reimbursed at the end of each quarter to Mr. A on actual basis, howere the monthly rent payment responsibility would be on Mr.A.

In the above given scenario Mr.A would be responsible to dedcut TDS while making the payment to Mr. B and M/s X would not be liable to deduct TDS while reimbursing the actual rent paid by Mr. A.

Boss you are not understanding the thing that you need to make seperate invoices for all these.

If you are claiming  reimbursement of actual exps incurred by you then you need to show it on a seperate invoice together with supportings.

but if show your ssrvice charges together with reimbursement on the same bill (invoice) then TDs would be deducted on the total amount (incl. reimbursement).

Regards,

Rahul

Originally posted by : Rahul Agarwal
	Boss you are not understanding the thing that you need to make seperate invoices for all these. If you are claiming  reimbursement of actual exps incurred by you then you need to show it on a seperate invoice together with supportings. but if show your ssrvice charges together with reimbursement on the same bill (invoice) then TDs would be deducted on the total amount (incl. reimbursement). Regards, Rahul

Dear Rahul

It is not a big deal for any of the party to make separate documents for reimbursement of expense and commisison. Ideally reimbursement of expenses are recovered through debit note and invoice is riased for commission.

@ Khan sir

Please express your views in following transaction for TDS

.........................................................................................................

Car Taken on hire for 1 month ..............Rs ........30000

Petrol Reimbursement ..........................Rs ..........30000

Mobil / Lubricants reimbrsement ........Rs ............5000

Parking fees / Toll Fees Reimbursement Rs      1500

Driver salary reimbursement .................Rs ..........7000

Proportionate Road Tax reimbursement Rs .......4000

Repair and maintanance of car reimbursement 5000

------------------------------------------------------------------------

Total payable ..........................................................82,500

debit notes are delivered for 52500 and bill for 30000

how much amount is eligible for TDS?

hello all,the function of my client is as follows;

Its a private ltd company,it takes goods hrom exporters,books place in a vessel .It pays freight to the shipper and charges to its client an amount which is littlebit higher than the freight paid to the shipper.

now my question is:  does they fallunder C&F agent .What is service ta treatment applicable to them?