An issue was raised before the CBDT to clarify the applicability of TDS on cooling charged paid to cold storage owners.
CBDT has issued a Circular No. 1/2008 Dated 10-1-2008 and clarified that:
"Since the arrangement between the customers and cold storage owners are basically contractual in nature, the provision of section 194-C will be applicable to the amounts paid as cooling charges by the customers of the cold storage."
Therefore, TDS under section 194-I shall not be deducted.
(Income Tax Chapter - XVII - B - COLLECTION AND RECOVERY OF TAX - B. - Deduction at source)