TDS on payments to Logistics company

We import materials from different countries . A logistics company in India arranges transport and also clearance. We reimburse the sea freight/air freight based on the agreed price and pay separately for clearing of goods.

Do we have to deduct TDS on the freight reimbursement at the agreed rates, if so what is the rate. For customs clearance what will be the TDS rate. Customs clearnace includes reimbursement of expenses incurred at cargo/port plus their service charges.

Thanks in advance for your help

 

Replies (7)

The above situation will fall under section 194C as it will be treated as an independent contract.

For Transport Contracts, if the Deductee provides the PAN, then, rate of TDS will be ZERO, If the PAN is not provided then, TDS has to be made at 1% for Individuals/HUF and 2% for others.

As per the notes given under to Sec 194C point 3 (i) it is mentioned that if the contractor is having 2 vehicles only.  

 

We need to deduct @ 1% or 2% as applicable. If he is not having pan additional 20% needs to recovered.  ( Section 206AA)

 

If he is paying the customs duty and any other expenses and supported by documents, we need not deduct TDS.

 

For his professional services/ any other reimbursement like seep money etc we need to deduct TDS.

Dear legends,

My doubt is ocean frieght paid is eligible to deducte TDS, please let me known

In 194 C ., it is mentioned " any sum paid" so reimbursement of expenses should not be deducted out of total bill amount , for purpose of deducting TDS

Income Tax Officer vs Dr. Willmar Schwabe India (P) Ltd. on 3 March, 2005.,  it was held that if separate bill is raised for reimbursement of expenses , TDS need not be deducted. The case was in respect of 194J payment  .

Stock Out ? under TDS

TDS on payments rendered to contractors and subcontractors is dealt with in Section 194C.
TDS is expected to be withheld if the total amount charged or billed on a deal during the P.Y. reaches Rs. 1,00,000.

 

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