TDS Provisions

[CA Rachit Agarwal]

Assessee is making the export of goods. Assessee is paying the sea freight to Non Resident shipping company for the export of goods outside India. Payment to shipping company is being remitted outside India and that also in foreign currency.

In terms of Circular No.723, 1995 Section 195 and section 194C would not apply, where the provisions of the section 172 apply.

Kindly advice whether TDS will be applicable for the payments made for sea freight.

[CAGOPALJI AGRAWAL]

Mr. Rachit, you are correct. Tax is not required to be deducted on payments made to non-resident shipping companies or their indian agents.

AI Summary

TDS on sea freight payments: no deduction required for non-resident shipping companies or their agents.
Payments of sea freight remitted abroad in foreign currency to non resident shipping companies for export of goods are not subject to tax deduction at source; this non deduction also applies to payments made to Indian agents of such non resident shipping companies where the special maritime provision and accompanying administrative guidance govern instead of general withholding provisions.