|QUERY:||Assessee engaged in imports and/or exports engage services of Clearing and Forwarding (C & F) agents. Payments to such C & F agents typically comprises of following:
(a) Reimbursement of freight paid to shipping companies or airlines.
(b) Reimbursement of freight on local transportation.
(c) Reimbursement of import or export clearing expenses like payments to Port Trust, Airport Authorities of India, miscellaneous charges, etc.
(d) Reimbursement of bonded warehousing charges.
(e) Reimbursement of Customs duties and Octroi.
(f) Reimbursement for Crane and Machinery charges to Port Trust. etc.
(g) Agency service charges.
(h) Service tax.
Whether any tax is liable to be deducted u/s. 194C of the Income-tax Act, 1961 on any of the above payments to C & F agents?
|ANSWER:||Click here to read the full answer of the expert|
|EXPERT:||CA. H. N. Motiwalla|
|CATCH WORDS:||Contractor, reimbursement, tax deducted at source|
In ITO vs. Dr. Willamer Schwable India (P) Ltd. [3 SOT 71 (Del.)], the Tribunal has held that reimbursement of actual expenses where no profit element is involved, is not liable for the TDS. Similarly, it has been held by the Delhi High Court in Handicrafts & Handloom Export Corpn. of India vs. ITO [140 ITR 532]; that the amounts received by an assessee