Service Tax on Comission Agent located outside India (Intermidatory Services)

After Notification No. 14/2014-ST dated 11^th July, 2014 came into effect on 1^st October, 2014, services provided by a commission agent (being an intermediary) located outside India is out of the purview of Service Tax as these services are now governed by Rule 9 of the Place of Provision of Service Rules, 2012, as per which the place of provision of this service is the location of service provider, which in this case being out of India, is not chargeable to Service Tax.

TDS on Taxi Hire Charges

TDS under Section 194C - Payment to Contractors

I.           194C(1) - Any person responsible for paying any sum to any resident for carrying out Any Work shall, at the time of credit of such sum to the account of the contractor or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to—

(i) one per cent where the payment is being made or credit is being given to an individual or a Hindu undivided family;

(ii) two per cent where the payment is being made or credit is being given to a person other than an individual or a Hindu undivided family,

of such sum as income-tax on income comprised therein.

II.      As per Explanation (iv)(c) given under Section 194C defines “Work” to include “carriage of goods and passengers by any mode of transport other than railways”

Therefore, TDS shall be deducted on the Taxi Hire Charges as rate prescribed under section 194C of the Income Tax Act, 1961

No TDS on payment made to shipping agents on foreign shipping companies

a) Section 172 deals with shipping business of non-residents and as per section 172(1) the provisions of sections 194C and 195 relating to tax deduction at source are not applicable.

b) Section 194C applies to payments made to any "resident" and section 172 operates in the area of computation of profits from shipping business of “non-resi­dents”. Thus, there is no overlapping in the areas of operation of these sections.

However, no TDS shall be deducted in case of payments made to shipping agents of non-resident ship-owners or charterers for carriage of passengers etc., shipped at a port in India as the agents acts on behalf of the non-resident ship-owner or char­terer and they steps into the shoes of the principal.

Reference Circular no 723 dated 19-09-1995

http://www.incometaxindia.gov.in/Communications/Circular/910110000000000280.htm