TDS on Commission to director

[Rahul Dwivedi]

Actually the practice follow in the industry is that any person whether director, employee or any other third person (i.e. shipping line, CHA etc.) who moves the container for the company (in CFS) gets commission/rebate. The rate of rebate is depends on Volume.

We are paying monthly remuneration to directors but as trade practice, for movement of containers director get commission.

My personal view is that any person (director or Third party ) gets commission for container movement so TDS EVEN CASE OF COMMISSION TO EXECUTIVE DIRECTOR should be deducted U/s 194H/J & should not be treated as salary.

Require your expert opinion on the same.

AI Summary

TDS on commission: payments for container movement to directors should attract withholding as commission not salary. Whether commissions paid to a director for moving containers should be treated as commission subject to TDS under the provisions for commission/fees rather than as salary is the core issue. Industry practice pays volume based rebates to directors, employees and third parties for container movement while directors also receive separate monthly remuneration. The author contends that payments for container movement to any person, including executive directors, are commission/fees and require TDS deduction under the provisions governing commission/fees, not salary.