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TDS on freight in purchase invoice

Jiten (CA) (167 Points)

04 September 2007

Suppose We received following invoice of purchase material from supplier-

Material Value--100,000/-

Transportation charges-25000/-

Total- 125000/-

Should we deduct TDS on freight i.e. 25000/- even we are paying the same to supplier of material.

Thanks

Jitendra

jbothra @ gmail.com

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8 Replies

S.RAVICHANDRAN (FINANCE MANAGER) (422 Points)
Replied 04 September 2007

Since TDS is applicable for all the contract payments under 194C, the question of deducting tds for the supplier of materia is not relevant. 194C says if the contract payment could not be segregated into labour and material componenets, TDS is deductible even for the material componenet. In this case, the labour payment of freight charges clearly attracts TDS since the payment exceeds Rs.20000.

(Guest)

Although the answer givev by Mr.S.Ravichandran is true but i am not agree with this statement completely because the freight is in invoice and that is a concract made between the supplier and the cargo company therefore the liability of deducting tds is on the supplier no need to deduct the tds on freight. But when the freight is paid directly to cargo company then we have to deduct the tds and have to deposit the same. Thanks and Regards

Prashant Nayak (Employee) (28 Points)
Replied 18 September 2009

Dear Sir, in this case if we pay the freight amount to supplier and it is below Rs. 20000, but we don't know whether the cargo owner has crossed Rs. 50000 limit, then will it attract TDS u/s 194C ? Kindly quote the relevant Circular or Case Law, if any, in support of your answer.

CA Anurag Garg (Chartered Accountant) (339 Points)
Replied 18 September 2009

TDS is deductible either from supplier or from transporter to whom the payment is made as frieght purports to us

swohra (none) (537 Points)
Replied 18 September 2009

If Purchase invoice includes VAT even than One has to deduct tds on total amount of invoice or only on freight amount?

Sunil (Trader) (2611 Points)
Replied 18 September 2009

The provision is clear in 194C. There is NO FREIGHT contract between you and the seller. Your contract is for merchandis delivered at your doorstep.

The seller has entered into a contract with the transporter and therefore the section 194C casts the obligation on the seller to deduct the TDS. You do not have contract for transportation with seller to deduct TDS.

Rohit Kumar Krishnalal Shah (Store Keeper) (24 Points)
Replied 21 March 2010

In government department if we have taken any suuplies like stationery, furniture, computer, and other miscellaneous materials and we are making such payments, is tds to be deducted from their bill or not

Rohit Kumar Krishnalal Shah (Store Keeper) (24 Points)
Replied 21 March 2010

Dear Sir,

Please reply me about TDs deduction by government department should be made from the suppliers bill payment who supplies materials like stationery, furniture, compute etc.

Rohit Shah, Store Keeper, Archaeological Survey of India, Vadodara