TDS U/S 194 Q ON ELECTRICITY

[CABIJENDERKUMAR BANSAL]

Dear All,

My client company is an owner of factory premises, electricity connection is in the name of owner company.

It has leased the premises to another company who is directly paying the electricity charges to the electricity supplier.

Now, in this case, the turnover of both the companies exceeds ₹ 10 crores during the financial year immediately preceding the financial year.

My query is, who is responsible for TDS deduction on electricity purchase. Tenant company or owner company ?

And, in another case scenario if the owner being an Individual, not having any PGBP Income, but tenant company having PGBP Income with turnover exceeding ₹ 10 crores in every year. In this case, is tenant company, who is directly paying electricity charges, liable to deduct TDS under section 194Q ?

[Ganeshan Kalyani]

In my view, the name on the electricity bill would matter. The TDS will be deducted by the owner.

[Ethirajan Parthasarathy]

Though electricity is GOODS, CBDT in its circular exempted this for Section 194 Q.This section is applicable only if Electricity is purchased from private parties who generate power from Wind mill etc

AI Summary

TDS under Section 194Q may not apply to electricity except from private generators; bill name affects deduction responsibility. The question is whether TDS under Section 194Q applies where a tenant pays electricity suppliers directly though the connection is in the owner's name and turnover thresholds are exceeded. One view treats the billholder (owner) as the withholding obligor; an alternate view relies on a CBDT circular excluding electricity from the scope of Section 194Q except for purchases from private generators.