TDS is applicable for Warehouse Cargo Insurance Charges or not

[MUTHUKUMARAN K]

We got private bonded warehouse tax invoice with collect Storage Charges and Warehouse Insurance Charges in single invoice. TDS percentage is what ? and TDS deduct both charges ot not?

with regards

K.Muthu Kumaran

[Sadanand Bulbule]

It is already answered at issue ID No. 120313.

[Johnson Jame]

Hi,

For your query:

1. TDS on Warehouse Storage Charges: Yes, TDS is applicable under Section 194C (payment to contractors) if the payment is made to a contractor for warehousing services. The applicable TDS rate is 2% (for companies) and 1% (for individuals/HUFs), provided the invoice value exceeds the threshold limit.

2. TDS on Insurance Charges: Generally, if the insurance premium is collected and paid to an insurance company, TDS is not applicable on the insurance portion. However, if it is being charged as part of a composite service (not directly paid to an insurance company), then tax authorities may consider TDS applicability under Section 194C.

3. Single Invoice (Combined Charges): If both storage and insurance charges are billed in a single invoice and are not bifurcated, its safer to deduct TDS on the entire invoice amount to avoid disputes. Ideally, you should request a break-up of the invoice for clarity.

It’s advisable to take a professional opinion from a tax consultant for documentation purposes.

AI Summary

TDS applies on warehouse storage charges under Section 194C; combined invoices may require TDS on total amount TDS is applicable on warehouse storage charges under Section 194C at 2% for companies and 1% for individuals/HUFs if the invoice exceeds the threshold. Insurance charges paid directly to an insurance company generally do not attract TDS. However, if insurance charges are part of a composite invoice not separately paid to an insurer, TDS may apply under Section 194C. When storage and insurance charges are combined in a single invoice without bifurcation, it is safer to deduct TDS on the entire amount to avoid disputes. Seeking professional tax advice and requesting invoice breakup is recommended for clarity and proper documentation.