deduction of tds

[Ramakrishnan Seshadri]

Dear Sir,

A manufacturer has supplied materials to my supplier . We have made payment to the manufacturer on behalf of the supplier and this amount has been debited to my supplier account.This amount will be adjusted on the supplies made by the supplier. My question is whether we have to deduct tds for the supplier.

Regards

S.Ramakrishnan.

[Guest]

Your query is incomplete, if the supplier supplies you material how come TDS is effected, have you entered into any contract/agreement for which the TDS has to be deducted. Kindly clarify to give appropriate comments/view/reply

[S RAMAN]

From your statement, you have effected payment to supplier on behalf of  " A" means that " A" brought materials. Then you are going to adjust what you have paid against goods to be supplied by " A". It is a sale transaction and hence the question of payment of TDS does not arise.

AI Summary

TDS deduction: payment made on behalf of supplier treated as sale transaction may not trigger withholding obligations. Question whether TDS is payable where a purchaser pays a manufacturer on behalf of a supplier and debits the amount to the supplier's account for adjustment against future supplies. Respondents sought clarification of the contractual basis; one concluded that, on the stated facts, the arrangement is a sale transaction and TDS does not arise, while another emphasized the need for further factual detail to determine withholding obligations.