Regarding TDS on Port Dues
Rajesh Kumar jakka
(Querist) 21 November 2009
This query is : Resolved
Dear Expert,
recently we have imported some of the capital goods from china and for that we have paid some amount to the Channai port trust authorities.
my doubt is whether TDS on such payment is required to be deducted or not?
is there any circular in this regard to deduct the TDS on payments to Govt or Govt authorities?
By
Raj
Raj Kumar Makkad
(Expert) 21 November 2009
TDS even on the payment to Govt. authorities is also mandatory.
Vineet
(Expert) 22 November 2009
What is the nature of payment to the port trust?
Every government authority is not a 'Person'as defined under Income Tax Act and hence not liable to taxed. Any payment to these authorities does not attract TDS provisions.
The Port trust is however, a local authority defined as 'Person' under Income Tax Act, hence TDS shall be deductible.
pkpworld..
(Expert) 23 November 2009
Relavant sections subject to TDS i.e. 192, 193, 194A, 194B, 194BB, 194C, 194D, 194EE, 194F 194G, 194H, 194I, 194J and 194LA are not applicable to such transaction.
Hence no TDS should be deducted in your case.
Rajesh Kumar jakka
(Querist) 24 November 2009
we paid such amount as Port demurrage charges etc., to the Chennai port trust autorities.
are such payments laible to TDS deduction
Vineet
(Expert) 25 November 2009
The Port Trusts are Local Authorities and therefore certainly certain payments made to them are subjected to TDS. Please find attached certain communications from Kolkata Port Trust regarding deduction of TDS and furnishing of certificate in this regard. I hope that settles one issue and for further clarification please refer to Circular No 93 of 1972 which I have reproduced in an identical query.
The relevant portion concerning payment to Port Trusts is reproduced below:
Q12: Does the requirement apply to the following payments made to port trusts?
(a) Wharfage for use of port trust facilities.
(b) Pipeline/pumping charges for use of pipelines owned and operated by port trusts for movement of petroleum products by pipeline from refinery to port installations.
(c) Port charges, such as, pilot charges, pier dues, lighterage, etc., levied by port trust for navigating, docking, anchoring, bunkering of tankers carrying petroleum products within the harbour limits.
A12: Payment other than lighterage charges paid to port trusts will not attract the provisions of section 194C. It is, however, to be noted that a port trust, being a local authority, is exempt from income-tax in respect of income accruing from the supply of a service within its own jurisdictional area and, as such, lighterage charges received by it will not be liable to tax in its own hands. The port trust could, therefore, obtain a certificate from the Income-tax Officer under section 194C(4) of the Income-tax Act and thus receive payments without deduction of tax at source.
Since Demurrages paid to port trust by you are compensatory in nature for overutilisation of services within the port premises, they are to be treted as compensation for services provided by them within their jurisdictional area. Please check with port trust whether they have obtained any certificate u/s 194C(4) for Nil deduction of tax and act accordingly.
