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TDS not applicable to Cash Discounts given to Customers for purchasing Goods in Bulk

The Kolkata bench of the Income Tax Appellate Tribunal, in EPCOS India Pvt. Ltd v. ITO recently ruled that assessee not required to deduct Tax at source (TDS) at the time of giving cash discounts to its customers for purchasing goods in bulk. Assessee-Company engaged in the business of manufacturing and sale of soft ferrite components, DC and AC capacitors, metalized films etc.

Assessee has claimed expenses under the head “trade discount and cash discount”, which was later disallowed by the Assessing Officer by observing that the discount offered to the customers was subject to various terms and conditions therefore it partake the character of commission and therefore, is liable to deduct tax at source under section 194H of the Act.

Article referred : http://www.taxscan.in/tds-u-s-194h-not-applicable-cash-discounts-given-customers-purchasing-goods-bulk-itat/18139/

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