Tds on freight payment to suppliers / transporters

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

25 July 2012 A Company is making payment of Rs. 25 lacs towards the freight incurred for transporting of raw materials by lorries.

The Question is:

(a) Whether TDS will be deducted on the above payment? If yes, then at what rate?

(b) Whether Service Tax is required to be paid? If yes then at what rate?

CA Sahil Singla..

CA Sahil Singla.. (Expert)
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25 July 2012 Sir

a) No TDS need to be deducted on any amount of Freight paid to transporter as per recent notification subject to condition that PAN of Transporter is obtained, otherwise deduct TDS @ 20%

b) pay service tax at the rate of 12.36% on 1/4 of total Freight paid. Also, no need to pay freight on Bills of less than Rs. 750.