Hi friends
Is the credit commission charged by bank to merchants for credit card swipes ( eg : banks charge @ 1.5 % on transaction value) subject to TDS deduction under 194 H . is there any case law on the same
Hi friends
Is the credit commission charged by bank to merchants for credit card swipes ( eg : banks charge @ 1.5 % on transaction value) subject to TDS deduction under 194 H . is there any case law on the same
if the amount exceeds Rs. 5000/-
hey got any case laws regarding the same??
plz help
To satisfy your self please read Section 2 of definitions in our IT Act. Item 28A defines interest as:-
“interest” means interest payable in any manner in respect of any moneys borrowed or debt incurred (including a deposit, claim or other similar right or obligation) and includes any service fee or other charge in respect of the moneys borrowed or debt incurred or in respect of any credit facility which has not been utilised ;]
The credit card swipe is actually a discount fee that you are paying for a receivable from the person buying goods from you. Therefore it is in the nature of Interest as per the above definition.
Interest paid to Banking Company established under Banking regulations act . Then no TDS. However, if your contract is with an NBFC, then you have to deduct TDS.
A lot depends on how it is billed to you. If it is a fee for accessing the gateway, Then you have test if it is a fee for technical services etc. As far as I remember, there is some mention that mere use of the system does not qualify it to be a technical service.
CAclubindia
