Dear All,
We are a Licenced Custom House Agent billing our clients for services rendered (Clearance of Import cargo through customs and sdespatching to client). A new client is deducting TDS under 194J @ 10% whereas all our other clients are deducting TDS under 194C @ 2%. On enquiring, they say that their auditors have advised them to deduct and have asked us for the rule of Income Tax wherein it is mentioned that CHA's come under contractors ie:194C. Please advise.
Regards,
Antonio
Debate Over Correct TDS Rate for Custom House Agents: Contractor vs. Consultant Classification Under Sections 194C and 194J A Licensed Custom House Agent (CHA) raised a query about discrepancies in tax deduction at source (TDS) rates by clients. While most clients deduct TDS under section 194C at 2%, a new client applies section 194J at 10%, citing auditor advice. Responses indicate that CHAs should fall under section 194C as contractors, but some argue that services like freight and inspection might qualify as technical services under section 194J. There is ongoing debate about classifying CHAs as professionals, which could change TDS applicability. The confusion arises from differing interpretations of CHAs' roles as contractors versus consultants. (AI Summary)
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