shashank (Chartered Accountant) (47 Points)
03 June 2010
Dear Experts,
The employee of our client has paid an amount exceeding Rs.20000/- towards courier charges which has been reimbursed by the company.
Will TDS be applicable on such an amount ?? The company has not paid it to the courier company directly but it has transactions with the company.
Pl quote any case laws or circulars
CA. Rajesh P. Ahir
(In Service @ PSU)
(687 Points)
Replied 03 June 2010
dear sir,
to the best of my interpritention of tds provisiones , in the present case it is not applicable.
shashank
(Chartered Accountant)
(47 Points)
Replied 03 June 2010
Thank You Rajesh...
But wat if the bill contains the name of the company as the consinor??
CA.G.Muguntha Narayanan
(Internal Auditor at TVS Motors)
(2195 Points)
Replied 03 June 2010
Dear Shashank,
in the case given by u, u have said the co. has reimbursed more than rs.20000/-. hence it s an expenditure for the co. so it will write it off in the P & L a/c as courier charges. So, definitely, tax must be deducted. Its not the employee who is incurring the exp. The exp. is incurred by the co. only.hence, TDS Must b deducted
shashank
(Chartered Accountant)
(47 Points)
Replied 03 June 2010
Thank You Mukund Sir,
Yes the company has definitely charged this expense as Courier Charges in the P&L account.
This was the stand taken by me but the same is not being accepted by the auditee, Could you kindly suggest any case laws / circulars / notiication etc
CA.G.Muguntha Narayanan
(Internal Auditor at TVS Motors)
(2195 Points)
Replied 03 June 2010
I dont think there is any case law for the given scenario. It has been said in 194C that the person RESPONSIBLE for paying the amount to contractor must deduct TDS. In the given case, the employee has no responsibility to pay to the courier agency. It is only the companies responsibility to pay to the agency. Hence, it has to deduct TDS. You can quote 194C to ur auidtee
Dhruv
(article)
(100 Points)
Replied 04 June 2010
Company has reimbursed the employee for carrying out a expenditure on behalf of the company , so clearly tds will be deducted on the whole amount ( including service tax if any)
CAclubindia
