TDS on commission on sales thru CFA

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  1. Naresh Dev

    Naresh Dev New Member

    CFA is Carting and forwarding Agents who bills the sales on behalf of Selling company. The inventory is owned by Selling Company, Invoice format is on Selling Company letter head. In the Lorry receipt, The consignor is the Buying Stockiests and Consignee is Selling Company. The title of the propety is transferred from Selling Company to Buying Stockiest. The payment is made by Buying Stockiests thru cheaque in favour of the Selling Company. In the instant case, CFA receives order , prepares Sales Invoice, packs stocks , hands over the stock to transporter and collect LR., collects cheaque on behalf of the Selling company and deposits in the Selling Company bank Account.
    In the instant case, CFA acts as service provider to hold inventory in company warehouse,prepare invoice, hands over stock to tansporter and collects payment. As per me the consideration is paid towards services of sales order. However, such consideration is termed as Commission on Sales and TDS deducted as 10% under Section 194H . On such Service charges, the Selling Company pays service tax also.
    Querry: Is this classification right? Or should such service charges be treated as CFA warehousing services and deduct 2% TDS.
  2. sai tejesh(

    sai tejesh( Active Member

    Obviously your interpretation is correct.
    Selling company has to deduct TDS @10% from your service charges U/S194H.
    SEC 194C is applicable to there is no contract between you(CFA)and selling company.
    You(CFA) are just providing services as an agent on behalf of selling company for commission.(NOT AS CONTRACTOR).
    Last edited: May 26, 2015
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    Kits123 New Member

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