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Tds

hemant garg (nothing) (136 Points)

15 April 2016

Sir, My query is: we have engaged vehicles from one or two transporters, they don’t have more than 10 vehicles and he procure the vehicles from the market as per our requirement. The bills are raising on this letter head , the bills are more than 10lakhs for each month. please clarify the above transaction will applicable for TDS 194C?, they don’t more than vehicles, he procured from different transporters from market, he pays freight amount to their transporters after deducting commission.

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2 Replies

Karthik.V.Kulkarni (Chartered Accountant) (594 Points)
Replied 16 April 2016

If the person is acting as an agent between you and transporters then you need to deduct tds at 10% u/s 194 H. what is required for non applicability of 194c is owning of 10 or less trucks. Thus as the person is hiring 194 c doesn't even come into picture.

Tribhuvan Aditya Singh (Student as well as Self-employed) (3710 Points)
Replied 16 April 2016

i would disagree with mr. karthik.
though the person is acting as an agent but he is not receiving comm. for his services offered. he is charging full transport fees and then paying to original transporters. the margin may be called commission but i will suggest look it other way where a person has hired transport vehicles and then providing transport services. amt paid to original transporters can be said to be hire charges.
now according to tds provisiions, tds u/s 194c not to be deducted if the transporter OWNS 10 or less carriages, which is not the case here because he hires them from original transporter. therefore tds u/s 194c will be applicable here and deducted accordingly on payments made.