TDS on freight charges

4526 views 19 replies

jagadish

accountant

64 Points Joined September 2007

Dear sir,

A pvt company paying a freight charges of Rs 11,236 to a transporting agnecy which includes the service tax @ of 12.36% charged by the transporting agency.Could you tell us wheather the TDS has to be deducted on gross amount(ie 10,000+ service tax @ 12.36%) or on the net amount(ie 10,000) of freight charges??????????

Replies (19)

Rajesh Bajaj

433 Points Joined March 2007

Tds on Gross Total

Amit Pareek

Corporate Executive

28 Points Joined July 2007

The CIT (TDS), Mumbai has given a clarification under the Right to Information Act, stating that TDS is to be deducted on the amount inclusive of Service Tax. Thus it may be followed.

CA.Saibaburao Nanduri

Chartered Accountant

3847 Points Joined May 2007

The intention of the statute is to collect TDS on freight but not on service tax. Hence TDS should be made on Rs.10000/-This is my opinion.

Dinessh Kumar

Articled Asst.

193 Points Joined August 2007

As Mr.Saibaburao said intention is not to collect tds on service tax. But section 194C says that tds should be deducted on amount credited to the party. You are giving credit to party inclusive of service tax. and hence tds is on whole amount only.

CA Manoj Sahoo

Service-CA

44 Points Joined June 2007

Sec 194 C used tyhe word "Any sum" .The Any sum might be reimbursement of expenses with out bills , service TAx etc .So TDS is on Full amount .

CMA Gul S

Program Manager

5910 Points Joined August 2007

Hi Service tax is something like Excise Duty and when we calculate Sales Tax we take the Gross value. In this case we should take the gross amount ie incl of Service Tax for TDS calculations

Late CA Sampat Jain

Chartered Accountant

4772 Points Joined March 2007

on gross amount

Guest

428330 Points Joined August 2012

TDS should be on 10000/- and not including service tax..

siddh

Article (Final Result waited)

391 Points Joined August 2007

jagdist first thing is that now u should not any amt of sevice tax to transporter,if u do so then service tax paid by u @ 3.09%,then tds will be deduct 10000 & if u pay s.tax to transportor then u should deduct tds on 10000+s.t.

Guest

428330 Points Joined August 2012

In case of freight charges, liability of deposit of service tax lies with the person or co. who is receveing service from the service provider. So in case you are paying freight charges to any transport co. against their services then you should deduct TDS on the amount of their service after excluding the amount of service tax. Based on your query TDS would be deducted on 10,000/- only. You should deposit the amount of service tax to the govt. treasury and also can avail the credit of the same.

Mallidi Ramabrahmananda Reddy

Profession

166 Points Joined May 2007

Elements of a single nature of payment shall not be segregated for TDS puropose. Hence gross is to be considered

sanjeev

Manager- Accounts/Tax/Finance

229 Points Joined September 2007

In the tax audit of some export companies what i have found that they are deducting the TDS on gross amount of freight. The basic logic behind this is that what our income tax act says to deduct TDS on the amount credited to the account of payee(to whom payment is to be made). That's why if we credit the full amount to the acccount of our payee then TDS would be deducted on the amount credited which would include the element of service tax too.