Is TDS applicable on bill discounting charges?

“Where assessee had borrowed money from financiers for making payment to its suppliers and had paid ‘financial charges’ to financiers and debited same under head “Discounting charges, said discounting charges were in nature of interest & hence liable to TDS u/s. 194A”. … Hence the provisions of TDS are not applicable.

Is TDS applicable on discounting charges?

When the bills are discounted, M/s. … Lalji Financial on account of discounting/factoring charges without deducting TDS. According to AO, these factoring /discounting charges are interest expenses as per the provisions of section 2(28A) of the Act and assessee is liable to deduct TDS u/s. 194A.

Is TDS deducted on electricity bill?

The consumer of DNHPDCL, who is covered under section 194Q will intimate that it is liable to deduct TDS u/s 194Q from the payment of purchase consideration (i.e. payment against the sale of electricity from DNHPDCL) to be made or credited to us.

How is invoice discounting taxed?

Only matter involved is income received in advance in the nature of interest income on discounting of bills against letter of credit is to be taxed on receipt basis or accrual basis. Assessee contended that there was no escapement of income.

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How does invoice discounting work?

Invoice discounting enables businesses to gain instant access to cash tied up in unpaid invoices and tap into the value of their sales ledger. It’s simple: when you invoice a customer or client, you receive a percentage of the total from the lender, providing your business with a cash flow boost.

What is Bill discounting in financial services?

Bill Discounting is a trade-related activity in which a company’s unpaid invoices which are due to be paid at a future date are sold to a financier (a bank or another financial institution). … This process is also called “Invoice Discounting”.

Is GST charged on electricity bill?

GST is exempted on the electrical energy vide notification no. 02/2017 –Central Tax (Rate) dated 28.06. 2017 whether be it thermal energy, solar energy or hydro-power or any other form of electrical energy. GST is also exempted on electricity transmission or distribution utility by way of notification no.

Is GST applicable on electricity charges?

However, CGST department has stopped paying GST component on electricity and incidental charges from July 1, 2017 under the pretext that GST is not applicable in terms of Rule 33 of the CGST Rules, 2017 on such electricity charges even though such charges are clearly incidental expenses in respect of supply of service …

Is TCS applicable on electricity charges?

Transactions in electricity, clean energy certificates, securities and commodities traded through recognised exchanges are not subjected to tax collected at source (TCS) or tax deducted at source (TDS) which kick in from 1 October on e-commerce operations, the Central Board of Direct Taxes (CBDT) said on Tuesday.

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Is invoice discounting a good investment?

Bill discounting is not market-dependent

Invoice discounting provides a great investment avenue to protect yourself against market volatility and economic fluctuations while generating high profits. … It is these invoices that are then discounted and purchased by investors on the KredX platform.

What are the advantages of invoice discounting?

What are the Advantages of Invoice Discounting?

  • Increased Cash Flow. …
  • Speeds up the Working Capital Cycle. …
  • No Need to Inform Clients. …
  • Business Retains Control. …
  • Only pay Interest on the Money that you Borrow. …
  • Facilitates the Earlier Paying of Suppliers. …
  • Bad Debt Protection Offers. …
  • Better Working Capital Means you can Expand.

How are LC discounting charges calculated?

To calculate the discount charge use the following formula (remember to adjust for any minimum base rate): Discount charge = ((FIU x (DM + BR)) / 365) x number of days.

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