SECTION-194Q-TDS ON PAYMENT OF CERTAIN SUM FOR PURCHASE OF GOODS
Section 194Q was inserted by the Act No. 13 of 2021, w.e.f. 1-7-2021 which says to deduct TDS on purchase of goods subject to certain conditions fulfillment.
Let’s see in detail how the whole provisions of this section works, its applicability & other burning issues.
APPLICABILITY
> Any Person, Being A Buyer Who Pays Any Sum To Resident Seller.
> For Purchase of Any Goods
> Value Of Such Goods Exceeding Fifty Lakh Rupees In Any Previous Year
> At the Time of Credit or Payment, Whichever Is Earlier
> Deduct TDS @0.1%
> Of Sum Exceeding Fifty Lakh Rupees.
DEFINITION OF BUYER
> Whose Total Sales, Gross Receipts Or Turnover From Business > Ten Crores During The Financial Year Immediately Preceding The Financial Year In Which Goods Are Purchased.
> If any difficulty arises in giving effect to the provisions of this section, the Board may, with the previous approval of the Central Government, issue guidelines for the purpose of removing the difficulty.
THIS SECTION NOT APPLIES TO
> Transaction on Which Tax Is Deductible Under Any of the Provisions of This Act
> Tax Is Collectible Under the Provisions Of Section 206C Other Than A Transaction To Which Sub-Section (1H) Of Section 206C
GUIDELINES BY CENTRAL GOVT VIDE CIRCULAR NO-13 OF 2021
♦ TRANSACTIONS CARRIED THROUGH EXCHANGES
Section-194Q Not Applicable Where
√ Transactions In Securities & Commodities Through Recognised Stock Exchanges Or Cleared And Settled By Recognised Stock Exchanges.
√ Transactions In Electricity, Renewable Energy Certificates & Energy Saving Certificates Traded Through Power Exchanges Registered In Accordance With Regulation 21 Of Cerc.
♦ CALCULATION OF THRESHOLD FOR financial year 2021-22- CERTAIN ISSUES
√ Section-194Q Will Not Applicable On Any Sum Credited Or Paid Before 01.07.2021
√ If Either Credited Or Paid Before 01.07.2021- Section-194Q-Not Applicable
√ Threshold (Rs 50,00,000/-) During F.Y. 2021-22 Will Be Computed From 01.04.2021. If Already Paid/Credited Rs 5000000 From 01.4.2021 To 30.06.2021, Then Section-194Q Will Be Applicable.
♦ ADJUSTMENT OF GST FOR THE PURPOSE OF TDS U/S 194Q
# CIRCULAR NO-23 OF 2017 DATED 19.07.2017 Says That- In Terms Of Agreement Between Buyer & Seller, If Component Of GST Is Indicated Separately, TDS Will Be Deducted Without Considering Component Of GST.
# Meaning Thereby In Section-194Q, If Any Amount Is Credited In The Account Of Seller & That Amount Is Comprised Of GST Component, Then TDS Will Be Deducted On Amount Excluding GST. However If Payment Is Made Earlier, Then TDS Will Be Deducted On Entire Payment As It Is Not Possible To Identify GST Component In Payment.
♦ ADJUSTMENT FOR PURCHASE RETURN
√ PURCHASE MADE- PURCHASE RETURNED- TDS ID Already Deducted On Purchase Prior To Return- Seller Refunded Amount For Purchase Return- TDS Already Deducted May Be Adjusted Against Next Purchases From Same Seller.
√ No Adjustment Required If Purchase Return Replaced With Goods.
# OTHER FAQS
Whether Non-Resident Can Be Buyer For The Purpose Of Section-194Q ?
Not Apply To NR If——–Purchase Of Goods Is Not Effectively Connected With Its Pe In India.
Whether TDS Is To Be Deducted When Seller Is A Person Whose Income Is Exempt ?
TDS Will Be Not Be Deducted If Seller Is A Person Who Is Exempt From Income Tax Under The ACT (Like RBI ACT, ADB ATC ETC.) If Part Of Income Is Exempt, Then This Clarification Will Not Apply.
Whether TDS Is To be Deducted On Advance Payment?
Yes, As Per This Section TDS Is To Be Deducted On Credit Or Payment Whichever Is Earlier.
Whether Section-194Q Applies To Buyer In The Year Of Its Incorporation?
Since Criteria Of RS. 10 Crore Turnover In Preceding Year Doesn’t Satisfy Then This Section Will Not Applicable In The Year Of Incorporation.
Whether Section-194Q Applies If Buyer’s Turnover In Preceding Year Is Rs 10 Crore Or Less ?
If Turnover From Business Carried On By Buyer Exceeds Rs 10 Crore Then Section-194Q Will Be Applicable. Non Business Income Will Not Be Considered In The Ten Crore Limit.
APPLICATION OF SECTION-194O, 206C(1H) & 194Q
√ If TDS Deducted By E-Commerce Operator U/S 194O, Then Transaction Will Not Be Subjected To TDS U/S 194Q
√ If Transaction Is Both Within The Purview Of 194O & 194Q, Then The Tds Will Be Deducted U/S 194O & Not 194Q.
√ If Transaction Is Both Within The Purview Of 194O & 206C(1H), Then The TDS Will Be Deducted U/S 194O & Not 206C(1H).
√ If Transaction Is Both Within The Purview Of 194Q & 206C(1H), Then The TDS Will Be Deducted U/S 194Q & Not 206C(1H).
SOURCE- INCOME TAX ACT WITH ITS RECENT CIRCULARS
Does Sec 194Q is applicable on Freight, Packing or Loading charges on purchase of goods. Eg- Material Value – 1,00,000 Packing Charges 1,000 GST Value 18,180 Total Invoice Value— 1,19,180/- on Above what would be the TDS on Goods deduction? please confirm.
194Q TDS Applicable on base value of invoice or total invoice value can you please confirm
If Invoice amount is 100rs and LD(Late delivery charges) of 2 rs is charged on vendor and payable value reduced to 98 Rs, so weather TDS to be deducted on 100Rs or 98Rs
Basic value 200,000/-
freight charges of Rs,11,000/-
Igst 18% of Rs.37,980/-
total invoice value is Rs.248,980/-
Dear sir my question is regarding to TDS 194Q
sir, please let me know can i deduct TDS on 194Q on only material or including freight charges.
basic value 52,48,350/-
freight charges 56,000/-
total 53,04,350/-
gst @18% 9,54,783/-
now here TDS u/s 194Q will be applied on just basic value of 52,48,350/- or on amount including freight I.e., Rs.53,04,350/- please clarify
If purchase licence rupees 6005000 and rdiscount on that purchase rupees 5000..net payment to party 6000000 then how tds ll b calculated..on 1000000 or 1005000
PURCHASED GOODS 60 LAKHS AND PAYMENT SETTLED THROUGH SALES BILL .TDS TO BE DEDUCTED BOTH THE PURCHASER
Purchase amount :4800000/-
GST@18% :864000/-
Total Bill Amount :5664000/-
Whether TDS u/s 194Q is applicable or not
We have paid an advance of Rs. 6,00,000/- and deducted TDS as per the provision of 194Q. But the vendor has charged material and freight price in the same invoice. Here we need to adjust the freight amount also from the same advance.
How to charge TDS on freight as it will attract 194C
TDS 194Q DEDUCTED ON PURCHASE OF GOODS
LATE PAYMENT INTEREST RATE …….
Dear Sir
We have a party from which we purchased goods in VAT but payment is being made in September-21.and the amount is above 50lakh+.
So will the 194Q TDS be applied to this payment or not?
is 194 q is applicable on the bill value or taxable value
TOTAL PURCHASE 5600000 UPTO 30-9-21
WHAT IS THE TDS AMOUNT
DEAR SIR
PLEASE HELP US REGARDING TDS TO BE DEDUCTED @ 0.1% 194 Q SECTIONS W.E.F 01.07.2021 WHETHER TO BE DEDUCTED ON TAXABLE VALUE OR ON TOTAL VALUE IF TAXABLE VALUE IS 1000
ADD GST 118
INVOICE VALUE 1118
WHETHER TO DEDUCTS TDS ON RS.1000 OR ON RS.1118 PLEASE GUIDE US
ONLY TO DEDUCTS TDS ON RS.1000 ,ITS WITH OUT GST
ON Basic Value.
TDS will be deducted on taxable value (1000)
PURCHASE IN AGRICULTURE PRODUCE MARKET COMMITTIEE YARD THROUGH WAY KACHA ADTIYA ON COMMISSION BASIS, TDS ALREDY DEDUCTED ON COMMISSION. APPLICABLE 194 Q
1st qtr our purchase 01.04.2021 to 30.06.2021 for Rs.1534000 &
2nd qtr purchase 01.07.2021 to 30.09.2021 or Rs.5600000
tds ded eligible or not eligible
TDS u/s. 194Q on Total Value.
इनव्हॉइस व्हॅल्यू -100000
जीएसटी@18 % -18000
टोटल व्हॅल्यू -118000
TDS @0.1% PM एकूण मूल्य कृपया स्पष्ट करा
TDS ON PURCHASE IN APPLICABLE FROM 01.07.2021
FOR EX :- ONE PURCHASE FROM 01.04.2021 TO 31.08.2021 RS. 5900000/- UPT TO 30.06.2021 PARTY ADDC TCS 0.10 % THEN WHAT WE DO FOR TDS DEDUCTION ON 5900000 OR 900000
PLEASE SIR REPLY ME
VIJAAY PANDE
ACCOUNTANT
TDS ON 900000 ONLY
INVOICE VALUE -100000
GST@18% -18000
TOTAL VALUE -118000
TDS @0.1% PM TOTAL VALUE PLEASE CLARIFY
Only on invoice value Rs. 1 lac
Does Sec 194Q is applicable on Freight, Packing or Loading charges on purchase of goods.
Eg- Material Value – 1,00,000
Packing Charges 1,000
GST Value 18,180
Total Invoice Value— 1,19,180/-
on Above what would be the TDS on Goods deduction? please confirm.
can we deduct tds on purchase of goods on invoice basic value or gross value of invoice
I want to know that tds on purchase is on cess amount is calculate when payment made
An invoice contains both elements , HSN & SAC , how to deduct tax u/s 194 Q
TDS 194 Q should deduct on all invoices or any one invoice in month
whether TDS U/S 194Q will be deducted including GST or not?
If the seller already raised the invoice with TCS let us assume the invoice date is on 30.06.21 in this case is buyer need to deduct the TDS for the credit of the invoice raised on 30.06.21.Please advise
Dear Sir ,
Kindly confirm TDS u/s 194Q to be deduct on taxable value or invoice value. Because still its confusing some deduct on taxable value and vis versa.
Plz sir replay…….
if seller turon over is 75 lach in FY 2020-2021 & 35 lach in julay Fy Year . is tds on purchage i saplicable ?
In case of 194Q whether TDS deduction amount calculate on the Taxable value or on gross value including GST .
Sir in circular its specified that gst on services will exclude from purchase amt for the calculation of tds pls explain it and whether Vat is deducted from purchase value to calculate tds or only gst amount is deducted
Code number for Sec 194Q to be mention in Form ITNS 281 while making payment of TDS on Purchase of Goods
If i purchased goods worth Rs. 44 Lacs till 30.06.2021 and after that i purchase goods worth Rs. 8 Lacs, then on which amount i have to deduct TDS from the Party on Rs. 2 Lacs or on whole Rs. 8 Lacs please suggest
Dear Sir
If the bill consist GST then whether the TDS of 194Q to be deducted on whole bill amount or excluding GST amount
tds to be deduct on taxable value. i.e. excluding cgst sgst igst.
PETROLIUM DEALER WHERE VAT IS CHARGED IN PURCHASES BILLS.
WHETHER TDS 194Q IS DEDUCED WITHOUT VAT OR INCLUDING VAT
in petrolpump on deisel or petrol purchase tds deducted on including vat or excluding vat.
194Q TDS DEDUCTED ONLY PURCHASE BILL YA PAYMENT DONE FIRST ?
Hello sir this side sachin, I want to know one thing how to determine the exemption limit , with gst component or without gst components , suppose one bill amount is 19 lakh with gst and another bill amount is 22 lakh with gst before 30.06.2021 and one purchase is done on 1.07.2021 for rs 17 lakh with gst & gst rate is 18% , now how to calculate exemption limit on which amount gst component or without or on which amounts we deduct tds
ON WHICH AMMOUNT TDS WILL BE DEDUCT?WITH GST AMMOUNT OR WITHOUT GST NET AMMOUNT?
Pls confirm if TDS 194 Q is applicable on purchase of Rice Husk for boiler
SECTION-194Q TALKS ABOUT-Deduction of tax at source on payment of certain sum for purchase of goods. As per my view, rice husk comes under the category of goods. And also till now, there is no list of goods specified by Govt. on which TDS under this section will not be applicable.
194Q IS APPLICABLE
IF MILL DESPATCHED GOODS ON 29-06-2021 AND IT ADDED TCS AND WE RECEIVED THE GOODS ON 4-07-2021. THEN WE HAVE TO DEDUCT TDS ON THIS BILL OR NOT WHEN PAYMENT IS DONE
INVOICE IS DATED 29.06.2021 ?
Whether to deduct TDS on the Bill before 01.07.2021 if we are doing payment after 01.07.2021 and the total is exceeding 50 lakhs
CIRCULAR NO-13 DATED 30.06.2021 CLEARLY MENTIONS THAT-
—-Since section 194Q of the Act mandates buyer to deduct tax on credit of sum in the
account of seller or on payment of such sum, whichever earlier, the provision of this
sub-section shall not apply on any sum credited or paid before I st July 2021. If either of
the two events had happened before 1st July 2021 , that transaction would not be
subjected to the provisions of section 194Q of the Act.
(ii) Since the threshold of fifty lakh rupees is with respect to the previous year,
calculation of sum for triggering TDS under section 194Q shall be computed from 1st April, 2021. Hence, if a person being buyer has already credited or paid fifty lakh rupees or more up to 30th June 2021 to a seller, the TDS under section 194Q shall apply on all credit or payment during the previous year, on or after Ist July 2021 , to such seller.
Hope it clarifies your query.
Whether Govt. Department engage in Public Distribution System is required to deduct TDS u/s 194Q against purchase of sugar for more than 4 crores per month.
Circular add the following ;
,””However, if, for any reason, tax has been collected by the seller under
sub-section (I H) of section 206C of the Act, before the buyer could deduct tax under
section 194-Q of the Act on the same transaction, such transaction would not be
subjected to tax deduction again by the buyer. This concession is provided to remove
difficulty, since tax rate of deduction and collection are same in section 194Q and sub-
section (IH) of section 206C of the Act””. This happen when most of the suppliers levy TCS on their invoices which helps a large number of buyer to come out the ambit of this provision.
TDS 194Q DEDUCTED ON BEFORE OR AFTER GST AMOUNT?
IF TDS DEDUCTED ON AMOUNT CREDITED BASIS AND COMPONENT OF GST IS INDICATED SEPARATELY, THE NTDS WILL BE DEDUCTED ON BASIC AMOUNT EXCLUDING GST. HOWEVER IF TDS IS DEDUCTED ONM PAYMENT & THAT PAYMENT GST AMOUNT IS NOT IDENTIFIABLE, THEN TDS WILL BE DEDUCTED ON ENTIRE PAYMENT.
Before GST. 194Q not to be charged on GST amount
provision seller covering in this 194Q sections