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Tds on petrol or diesel

18 June 2025

if a gorverment department is purchasing fuel for agriculture use and for goverment vehicles, also purchasing ferilizers, pesticides and seeds, lpg gas cylinders from selected suppliers.

At the time of payment TDS will be deduct or not ?????

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Rama chary Rachakonda (Master in Accounts & high court Advocate email ID:ramachary64@gmail.com voice no:9989324294) (8249 Points)
Replied 18 June 2025

TDS Applicability The applicability of Tax Deducted at Source (TDS) on purchases made by a government department depends on the nature of the transaction.

Here's a breakdown:

Purchases Subject to TDS - *Fuel for Government Vehicles*: TDS might be applicable if the purchase is from a dealer or supplier who is not exempt from TDS. -

*Fertilizers, Pesticides, and Seeds*: TDS might not be applicable if these purchases are from manufacturers or suppliers who are exempt from TDS under specific sections of the Income-tax Act, 1961.

Purchases Not Subject to TDS - *Fuel for Agriculture Use*: If the fuel is purchased for agricultural purposes, it might be exempt from TDS, depending on the supplier's status and the specific provisions of the Income-tax Act. -

*LPG Gas Cylinders*: TDS might not be applicable if the purchase is from a public sector undertaking or a company exempt from TDS. Key

Considerations - *Section 194Q*: TDS is applicable on purchases of goods exceeding ₹50 lakh in a financial year from a resident seller. -

*Exemptions*: Certain government departments or purchases might be exempt from TDS under specific sections of the Income-tax Act. -

*PAN and Threshold*: TDS applicability also depends on the PAN of the supplier and the threshold limits specified in the Income-tax Act [1].

Conclusion To determine the TDS applicability, consider the following: -

*Nature of Purchase*: Identify the type of goods or services being purchased. -

*Supplier's Status*: Determine the supplier's status, including their PAN and exemption status. -