Section 194J Vs 194C of Income Tax Act [Extracts-Bare Act] Technical consultancy vs Technical or Consultancy Services

 

194J. (1) Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any sum by way of—

(a) fees for professional services, or

(b) fees for technical services, or

(ba) any remuneration or fees or commission by whatever name called, other than those on which tax is deductible under section 192, to a director of a company, or

(c) royalty, or

(d) any sum referred to in clause (va) of section 28,

shall, at the time of credit of such sum to the account of the payee 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 ⁵⁵[two per cent of such sum in case of fees for technical services (not being a professional services) or royalty where such royalty is in the nature of consideration for sale, distribution or exhibition of cinematographic films and ten per cent of such sum in other cases,] as income-tax on income comprised therein :

Explanation.—For the purposes of this section,—

(a) "professional services" means services rendered by a person in the course of carrying on legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or advertising or such other profession as is notified by the Board for the purposes of section 44AA or of this section;

(b) "fees for technical services" shall have the same meaning as in Explanation 2 to clause (vii) of sub-section (1) of section 9;

Explanation 2 to clause (vii) of sub-section (1) of section 9;

Explanation 2.—For the purposes of this clause, "fees for technical services" means any consideration (including any lump sum consi-deration) for the rendering of any managerial, technical or consultancy services (including the provision of services of technical or other personnel) but does not include consideration for any construction, assembly, mining or like project undertaken by the recipient or consideration which would be income of the recipient chargeable under the head "Salaries";

 

GST Challan Payment Online

 

To make the GST payment in pre-login mode, perform the following steps:

 

1. Access the https://payment.gst.gov.in/payment/ URL.

2. In the GSTIN field, enter your GSTIN.

3. In the Type the characters as displayed below field, enter the captcha text.

4. Click the PROCEED button.

 

5.  Select ANY OTHER PAYMENT and Proceed.

 

6. In the Tax Liability Details grid, enter the details of payment to be made. The Total Challan Amount field and Total Challan Amount (In Words) fields are auto-populated with total amount of payment to be made.

7. Select the Mode of E-Payment.

In case of E-Payment

a. In the Payment Modes option, select the E-Payment as payment mode.

b. Click the GENERATE CHALLAN button.

 

 

c. The OTP Authentication box appears. In the Enter OTP field, enter the OTP sent on registered mobile number of the taxpayer whose GSTIN/UIN/TRPID/TMPID is entered.

d. Click the PROCEED button.

 

 

 

e. The Challan is generated.

Note: You can also download the GST Challan by clicking the DOWNLOAD button.

 

 

f. Select the Mode of E-Payment as Net Banking.

g. Select the Bank through which you want to make the payment.

h. Select the checkbox for Terms and Conditions apply.

i. Click the MAKE PAYMENT button

 

 

Note: You will be directed to the Net Banking page of the selected Bank. The payment amount is shown at the Bank’s website. If you want to change the amount, abort the transaction and create a new challan.

 

In case of successful payment, you will be re-directed to the GST Portal where the transaction status will be displayed. The payment receipt is displayed. To view the receipt, click the View Receipt link. You can also make another payment by clicking the MAKE ANOTHER PAYMENT button.

 

 

TDS Rates for Ecommerce

 

Deductor: Vendor, who sells his/her products/services

Deductee: E-Commerce Operator/online shopping website, who maintains website for listing of such products/services e.g. Amazon, Flipkart, Snapdeal, Paytm, Myntra, Shopclues, Alibaba, Udaan etc.

Note 1: In case e-commerce operator/website has obtained Lower Deduction Certificate (LDC) u/s.197 of Income Tax Act,1961 , then applicable rate for TDS deduction of that particular Assessment year would be the rate as specified in Lower Deduction Certificate.

Note 2: Lower Deduction Certificate u/s.197 of Income Tax Act, 1961 is applicable for Particular Assessment Year & for that Particular Deductee – Deductor combination.

Note 3: Validity of Lower Deduction Certificate u/s.197 of Income Tax Act, 1961, can be verified from TRACES Portal.

Note 4: Vendor/Seller of Product/Services has to make payment of TDS on monthly basis to government and after filing of Quarterly TDS return (Form 26Q), reimbursement of TDS deposited has to be claimed from e-commerce operator by submitting TDS Certificate (Form 16A). They generally prefer TDS Certificate duly signed by Digital Signature Certificate (DSC) for prompt processing of TDS Refund Claim.

Note 5: Request/Application for reimbursement of TDS deposited has to be made through writing email/login through designated ID of the vendor’s provided on e-commerce portal. Such reimbursement is done through payment to the bank account or through adjustment from next invoice.

Note 6: TDS is deposited on the basis of Invoices of Fees & credit note of Fees generated by e-Commerce operator on the portal/ website, which are generally generated on the month end date/first week of the next month.

Note 7: In case of Credit Notes of Fees due to Sales Return/any other reason, TDS has to be deducted Net of Credit Notes from the invoices received. In case Credit Notes remain unadjusted in current month, then the same need to be deducted while next month TDS deduction. (upto same financial year only)

Note 8: In case amount of commission/logistics/other fees as depicted in the above table is below amount specified under section 194C/194H/194J, then TDS need not be deducted. Further limit (e.g.15,000 u/s. 194H) is section wise & not Fees head wise (i.e. combined limit by aggregating/adding up Collection Fees, Listing Fee, Commission Fees etc would be seen u/s. 194H).

Note 9: Vendors whose constitution is Firm/LLP/Company, they have mandatorily to deduct TDS. Individual & HUF firms to deduct TDS only if they get their accounts audited u/s.44AB of Income Tax Act.{ clause (a) & clause (b) of section 44AB }

Note 10: In case of Non Resident e-Commerce operator in India, TDS u/s.195 would be deducted, as section 194C/H/I/J are applicable for resident deductees only.

Note 11: Various nomenclatures are being used by different e-commerce websites to collect these Fees & Charges in the form of commission, advertisement & logistics etc. Bifurcating them to section 194C/194H/194J is really difficult task. However one may take help of SAC/HSN (as per GST Law) used in their Fees invoices for easy understanding.

Nature of Payment	GST HSN/SAC	GST Rate
Advertisement related – 194C
Sale of space for advertisement	998365	18%
Ad Services Fees	998365	18%
Logistics related – 194C
Easy Ship Weight Handling Fee	996812	18%
Shipping Fee	996812	18%
Courier Fees	996812	18%
Same Day Delivery Fee	996812	18%
Next Day Delivery Fee	996812	18%
Removal Fee	996812	18%
Pick And Pack Fee	996812	18%
Commission related – 194H
Nature of Payment	GST HSN/SAC	GST Rate
Fixed Closing Fees	998599	18%
Listing Fee	998599	18%
Refund Processing Fee	998599	18%
Payment Collection Fees	998599	18%
Closing Fees	998599	18%
Marketing Fees	998599	18%
Collection Fees	998599	18%
Commission Fees	998599	18%
Fixed Fees	998599	18%
Fee Discount	998599	18%
Cancellation Fee	998599	18%
Service Cancellation Fee	998599	18%
Referral Fee	998599	18%

Note 12: Proposed TDS u/s.194-O (w.e.f. 01/10/2020) is applicable to levy a TDS of 1% on e-commerce transactions requiring an ecommerce operator to deduct tax at the time of credit of sale/service amount to the account of e-commerce participant or at the time of payment thereof by any mode, whichever is earlier. Hence this section is independent of existing TDS sections. Further TDS u/s.194-O is to be deducted by e-commerce operator vis a vis. TDS u/s.194C/J/H/I as per details above is to be deducted by vendors of e-commerce operators.

Nature of Payment	Section	TDS Rate
Shipping Fee	194C	2%
Courier Fees	194C	2%
Marketplace Logistics Charges	194C	2%
Same Day Delivery Fee	194C	2%
Next Day Delivery Fee	194C	2%
Pick And Pack Fee	194C	2%
Easy Ship Weight Handling Fee	194C	2%
Removal Fee	194C	2%
Fulfillment Centre Service	194C	2%
Installation Fee	194C	2%
UnInstallation Packaging Fee	194C	2%
UnInstallation Fee	194C	2%
Fixed Closing Fees	194H	5%
Listing Fee	194H	5%
Refund Processing Fee	194H	5%
Payment Collection Fees	194H	5%
Closing Fees	194H	5%
Marketing Fees	194H	5%
Marketplace Marketing Fees	194H	5%
Marketplace PG Fees	194H	5%
Collection Fees	194H	5%
Commission Fees	194H	5%
Fixed Fees	194H	5%
Fee Discount	194H	5%
Cancellation Fee	194H	5%
Service Cancellation Fee	194H	5%
Referral Fee	194H	5%
Nature of Payment	Section	TDS Rate
Storage Fee	194IB	10%
Sale of space for advertisement	194C	2%
Ad Services Fees	194C	2%
Advertisement Charges/Fees	194C	2%
Franchise Fee	194J	10%
Tech Visit Fees	194J	10%