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Tds on freight

JMD (STUDENT) (563 Points)

07 May 2012

Dear Frnz, We are a manufacturing unit and getting some job work done from contractor. Now question is whether we have to deduct TDS on whole bill amount in which freight charges are mentioned separately or only we need to deduct tds on jobwork charges.

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6 Replies

neeraj (CA) (930 Points)
Replied 07 May 2012

I think if in accounts u r booking whole expenses as job work expenses then u had to deduct TDS on whole amount but if u r showing freight a/c separately the no need to deduct TDS on freight amount. But i m not so much sure abt that

Sonu Kumar (Account Manager) (665 Points)
Replied 07 May 2012

if Freight Charges are Charged Extra then TDS will be Deducted only on Labour Charges

manish (manager) (21 Points)
Replied 07 May 2012

if you are just paying freight as reimbursement to job worker, TDS need not to be deducted. however please ensure that job worker not earning any income out of this. for this you may take copy of bills of transporter as a proof from job worker. if job worker is earning paying less to transporter and charging more from you in that case you have to deducted TDS on freight amount charged to you.

Ki$hor B (Training & Advisory) (3015 Points)
Replied 07 May 2012

For payments made against a single bill that includes both Job work charges & Freight, to

be on the safer side deduct TDS on the total bill amount.

Alternatively, if the freight is in the nature of reimbursement consider asking the Job worker to submit two separate bills - then you can deduct TDS only on the JW charges and released full freight as reimbursement. (usual practice)

Roshan A (Chartered Accountant) (458 Points)
Replied 07 May 2012

I think you should deduct TDS on total bill amount as Sec 194C requires deduction of TDS on ANY SUM PAYABLE (and not the income) to the contractor.

CA Nilesh A. Vakharia (CA) (30 Points)
Replied 09 May 2012

TDS is to be deducted on Job charges only. Since, No TDS is to be deducted in case the contractor is in trasport business and he quotes PAN. As per Section 194C