TDS U/S 194Q ON PURCHASE FROM KACHHA ARTIYA

[umeshkumar jhawar]

'A Person Has , Let's Say Mr A, Turnover Above 10 Crore In AY 2021-22. He Is A Trader In The Grain Market. Mr A Buys Goods From Agent I.E. Kacha Adatiya. This Agent Acquires Goods From The Different Farmers In The Gram Market. Agent Issues A Sale Bill To Mr A In Which He Charges The Cost Of The Goods, Commission And GST. Mr A Does Not Know Who The Actual Seller Is, He Only Knows The Agent. The Agent Reports Only Commission Income In His Books Of Account And The Cost Of The Goods He Charges In The Bill Gets Adjusted Against The Farmer's Payment. Hence, The Cost Of Goods is Not Turnover/Sale Income For Him. Now My Question Is From View Point Of Buyer I.E. Mr A: 'Whether He Is Required To Deduct TDS U/S 194Q On Cost Of Goods Paid To The Agent? He Already Deducts TDS U/S 194H On Commission Paid To The Agent.'

AI Summary

Should Mr. A Deduct TDS Under Section 194Q on Purchases from Agent Kacha Adatiya? Conflicting Views Explored. A trader with a turnover exceeding 10 crores, referred to as Mr. A, buys goods from an agent, Kacha Adatiya, who sources from farmers. The agent only reports commission income, not the cost of goods, in his accounts. The query is whether Mr. A should deduct TDS under Section 194Q on the cost of goods paid to the agent. One response suggests deducting TDS on the goods' value minus the commission, while another indicates that if the goods are agricultural and the seller's income is tax-exempt, TDS under Section 194Q may not apply, referencing Circular 13 of 2021.