TDS deduct on warehouse insurance charges is applicable or not

[MUTHUKUMARAN K]

we got private bonded warehouse invoice. They collect Cargo storage Charges and Insurance Charges.

we dedect 10% TDS on both Storage and Insurance Charges its correct or not.

with regards

K.Muthu Kumaran

 

[Sadanand Bulbule]

10% TDS is to be deducted under Section 194J of the IT Act while making payment of fees /remuneration/commission for professional or technical services rendered.

However, cargo storage services, not being professional or technical services, fall under Section 194C liable to 1% or 2% TDS. So double check the facts.

[MUTHUKUMARAN K]

Sir thanks your reply.

But we deduct TDS 10% on Cargo Storage Charges treated at Rent - 194I

Warehouse insurance charges collect the same invoice so TDS deduct or not?

with regards

K.Muthukumaran

 

[Sadanand Bulbule]

TDS  on rent @ 10% is ok under Section 194-I[b] of the IT Act.

If insurance is cahrged as composite supply by the same warehouse owner, it forms part of gross rent consideration. Oherwise, if it is pass-through cost, no TDS is applicable.

[MUTHUKUMARAN K]

Sir thanks for your reply.

Warehouse insurance calculation is cargo value X no of weeks X Rate.

please surely confirm TDS deduct or not.

with regards

K.Muthukumaran.

 

[Sadanand Bulbule]

Refer clarification on deduction of tax at source on rental income under section 194-I of the Income-tax Act:

Circular No. 4/2008 dated 28-4-2008

 

[MUTHUKUMARAN K]

Thank you Sir .

AI Summary

TDS on warehouse insurance applies if insurance is part of rent; standalone reimbursement is not chargeable under TDS. TDS on warehouse insurance depends on its characterisation: if insurance is a composite supply forming part of gross rent consideration it is includible in rent and subject to TDS as rent under 194-I; if it is a pass-through reimbursement distinct from rent, no TDS on that component is applicable. Administrative guidance (Circular No. 4/2008) is relevant for rental TDS treatment.