TDS on Air Freight (included in supplier's bill) in case of imports

[VIJAY GUPTA]

We are paying to our foreign supplier in advance through proforma invoice which was excluding freight. Now they raised commercial invoice where freight charges in included and Bill of entry also bears the same value as on commercial invoice. So, there is an difference between proforma invoice and commercial invoice ( the freight amount ).

Now we have to pay the freight only to our foreign customer. Is there any TDS liability persists?

Sir plz also let me know relevant circular/ /notification no., which i can refer.

Thanks

AI Summary

TDS on reimbursed freight: recovery of supplier borne costs does not attract TDS, direct payment for freight does.
TDS depends on whether freight included in an import supplier's invoice is a reimbursement or payment for services. If the supplier originally bore the freight and later recovers it from the importer, that recovery is treated as reimbursement and does not attract TDS. If the importer pays freight directly or the payment constitutes consideration for freight services rendered to the importer, TDS must be deducted. The key inquiry is the substance-who bore the cost originally and whether the amount is mere recovery of expense.