Applicability of TDS and percentage

[d.v. gupta]

dear sir, we CHA making payment for freight to the non resident companies having no office in india. the non resident co. paid freight for our client and raise bill to us. we recovered the bill amount from client in india and make te freight payment incurred on our behalf to non resident co..kindly advise whether we should deduct tax at source. if yes, at what percentage?

[Guest]

In your case, assuming that the freight is for GTA and service is being provided partly in India, you have to ensure that you are working as a pure agent. In case of pure agent, the liability of payment of service tax on your client in India. Therefore, ask your client to discharge service tax on import of service of GTA. This more so that the services being partly or wholly provided in India.

AI Summary

Pure agent treatment affects withholding obligations; ensure the client discharges service tax on imported GTA services. TDS on freight payments by a CHA to nonresident providers turns on whether the CHA is a pure agent; if so, withholding shifts to the Indian client. Where freight is a GTA service provided partly or wholly in India, the client should discharge service tax on import of GTA services. No specific TDS rate is specified.