TDS on godown charges paid to transporter

Dear All,

I need a clarification.  A Company has an arrangement with transporter such that the stocks sent through the transporter are stored in the transporter's godown and from there it is despatched to various customers.

Since from 1st october 2009 freight payments made need not be tax deducted if there is a valid pan number. 

The transporter raises a seperate bill for the godown charges, but there is a no seperate agreement for this and it is included as a clause in the transporter's agreement.

Please clarifiy if Tax need to be deducted on this?  If yes at what percentage whether @ 2% or at  10%.

Thanks in advance.

Narasimhan.J

Replies (2)

Dear Narasimhan,

You may deduct the tax for godown charges as rent paid. The ITO may take the view as it is only rent paid for godown.So, don't take risk and deduct tax @ 10 %

Sir, If our client has not deducted TDS on the same and scrutiny has came. So how can I defend that scrutiny. Give some reference or case law or something else.

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