Tds on frieght charge

We purchases material from suppliers. Transportation arranges by suppliers and deliver goods to our factory address. Which details is given below:

Material Cost              Rs.2,10,500.00

Add : Freight Charge Rs.    31,500.00

Add : IGST                Rs.    43,560.00

Total :                        Rs.  2,85,560.00

our query is whether TDS should be deducted on above freight charges of Rs. 31,500

Replies (3)
Quick Summary
This discussion clarifies whether Tax Deducted at Source (TDS) needs to be applied to freight charges when a supplier arranges transportation and includes it in the total bill. The consensus is that if you have no direct contract with the transporter and only pay your supplier, TDS on the freight component is not required. The correct accounting entry involves debiting the Purchase Account with the net amount (material cost plus freight) and crediting the Party Account with the total invoice value.

The transportation is arranged by supplier and payment to supplier is paid by your supplier. You are paying to your supplier. You have no contract with the transporter. So no need to deduct TDS.

which entry pass is right in this situation

PURCHASE A/C -----------------------2,10,500.00

CARRIAGE INWARD A/C -----------    31,500.00

IGST A/C -------------------------------     43,560.00

                              TO   PARTY  A/C   ----------------------------2,85,560.00

OR

PURCHASE A/C --------2,42,000.00

IGST A/C ----------------    43,560.00

                    TO  PARTY  A/C   ----------------------------2,85,560.00

 

TDS not required to be deducted on above freight charges of Rs. 31,500.
You can Pass Second entry ;
i.e PURCHASE A/C ----2,42,000.00
IGST A/C ---------------- 43,560.00
TO PARTY A/C --------2,85,560.00

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