TDS Questions relates to Scrutiny

TDS / TCS 809 views 5 replies

C A tejal

Practising CA

108 Points Posted on 28 October 2010

This is a case relates to Scrutiny

I have a client who has purchased goods from out states and his seller has supplied goods to ABC transporter Co. but however ABC Transporter Co. has not actually transported goods. They will handover the goods to other person "X". My client has made the payment to "X".

In this manner in a year so many times my client has purchased the goods and it is supplied by ABC Transporter Co. But every time goods is actually transported by different person depending on the area of seller. And in that way my client has made payment to different person who transport on behalf of ABC Transporter Co.

Month Payment of Rs. Payment to

April 19000/- X

June 18000/- Y

November 17000/- Z

January 15000/- A

March 15000/- B

Total 84000/-

So in all total payment made in a year is above 50000/- but to different person every time on behalf of ABC Transporter Co.

Whether my client should deduct tax at source while making payment?

Also inform me if there is any circular notification or case laws which can support the views.....

Replies (5)

shailendra

Accounts Executive

128 Points Posted on 29 October 2010

Hi,

First of all tell me who raised biil for the supply of goods _individual or ABC Transporter Co.

Sunny Mongia

Finance Manager

66 Points Posted on 29 October 2010

As per my opinion, whenever payment made to a contractor for more than 50000 in a year then Tax is required to duuct. in the given case payment is made to different person but on behalf on same person. therefore, if payment is made in the name of ABC transporter then tax is required to deduct. otherwise no TDS apply

swapnil

CA Final

598 Points Posted on 29 October 2010

in case of all transport bill has in the name of ABC Transport co, than wheater or not the payment made to ABC Transport or on behalf of ABC Transport to other parties than,

pratical assumtion that in u r books the liability of creditors is ABC Transport, because all bill in the name of ABC Transport. so r liability is 2 Deduct TDS on all bill Rs. 84,000/-, when we book d bills

this is a tractical case i m handling, when i was job in a company.

but let me first some expert arguments r pending, so give d time,

exstremly thanks 2 tejal, sunny and shailendra 4 sharing with us, and best of luck

yashsaxena

Managing Director

71 Points Posted on 29 October 2010

Yes I agree with Sunny. as payment made to a service provider or contractor for more than Rs.50000/- in one year then Tax is desired to subtract or deduct. In this case compensation is completed for a unlike person but on behalf of same person. So, if payment is made in the name of ABC transporter then tax is required to deduct. Otherwise no TDS apply.

Parth - CA,CS,CMA

Learner

406 Points Posted on 29 October 2010

From 01/10/09, if the transporter provides his PAN to the payer, no TDS will be liable to be deducted. Refer 194C as amended by Finance (No 2) Act, 2009.

TDS is to be deducted before that date but in your case, the amount doesnt crosses that limit before october if you are talking about PY 2009-10.