Payment to transporter

This query is : Resolved

bhuvana (Querist)
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16 April 2014 Sirs,

We are commission agents in Cotton Business. We have tie-up with cotton suppliers, yarn sellers and yarn buyers.

We pay the transporter on behalf of the yarn seller to deliver goods at yarn buyers' depot. For this we receive money on account from the yarn seller and pay the transporter.

To be clear, we get money from the seller and pay the transporter instead of seller paying directly.

In our books we account it as - recd from seller and paid to seller, without involving the transporter - so at some point of time, we hold some excess money.

Query is : Will receipt of such money from yarn seller affect our income, i.e will it attract any service tax ?? or pls let us know the implications of this transaction (during the PY we have recd and paid to the tune of 8 lacs)

Thanks in advance.

Sandeep Dharar

Sandeep Dharar (Expert)
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16 April 2014 No it will not b regarded as ur income. It will also not attract Service Tax if u r providing free services to them. But TDS will b attracted in the payment to transporters by u(If PAN is not quoted).

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bhuvana

bhuvana (Querist)
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16 April 2014 thanq sandeepji. Transportation is not OUR exps na..we make only ON-BEHALF. Still will that attract TDS ???

Sandeep Dharar

Sandeep Dharar (Expert)
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16 April 2014 Yup TDS will b attracted u/s 194C (if PAN is not quoted by the transporter).

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