Payment to transporter

This query is : Resolved

Deepak Tapse (Querist)
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26 May 2015 Sir

W.e.f. 01/06/2015, declaration to be taken from transporter if Transporter has No. of Vehicle 10 or less than 10 and if more than 10 then we have to deduct applicable TDS. In this regards I have following queries.

1. Most of transporters come from outside City/State, In this regards who sill sign the declaration, because owner of transport co. is sitting in his office.

2. If we get trucks from transport contractor who arranges trucks and send the vehicle with his LR (Transport Contractor) who will sign the declaration. Weather Transporter contractor or the owner. Also in this case to whom we have to debit the transport amount.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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26 May 2015 1. by the actual owner of the transporter entity i.e in case of sole prop it will be the owner or in case of co the person authorised in this behalf by the co etc

2. it will be always the owner.

Deepak Tapse

Deepak Tapse (Querist)
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26 May 2015 Sir

Thank you very much for your reply.

In second point, I have concern with Transport Contractor. He arranges the truck for me and issue the LR of his firm. How can I know the owner. I have no contacts with owner and no any documents of owner.

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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09 August 2024 To address your queries regarding the payment to transporters and TDS implications as per the rules effective from 01/06/2015, let's break down the requirements and procedures:

### **1. Declaration from Transporters:**

#### **Requirement for Declaration:**
- **Rule 6A of the Income Tax Rules** (w.e.f. 01/06/2015) mandates that:
- If the transporter has 10 or more vehicles, TDS must be deducted.
- If the transporter has 10 or fewer vehicles, a declaration should be obtained from the transporter stating that they have less than 10 vehicles.

#### **Who Should Sign the Declaration:**
- **Transporter’s Owner or Authorized Person:** The declaration should ideally be signed by the owner of the transport company or an authorized representative of the company.
- **For Transporters Outside City/State:** If the owner is located outside your city/state, you can ask for a declaration to be signed by a person authorized by the owner. The declaration should still be valid as long as it is signed by someone who has the authority to make such declarations on behalf of the owner.

### **2. Transport Contractor vs. Owner:**

#### **When Dealing with Transport Contractors:**
- **Transport Contractor Arrangement:** If you are dealing with a transport contractor who arranges trucks and issues the LR (Lorry Receipt), you should focus on:
- **Contractor’s Declaration:** Obtain a declaration from the contractor regarding the number of vehicles they operate.
- **TDS Deduction:** If the contractor arranges the truck and issues the LR, you need to consider whether the contractor has 10 or more vehicles. If so, TDS should be deducted based on the applicable rates.

#### **Debit to Transport Amount:**
- **Debiting the Amount:** You should debit the transport amount to the account of the transport contractor who has issued the LR, not directly to the owner of the truck.
- **Documentary Evidence:** Ensure you keep proper documentation of the transport services provided, including the LR issued by the contractor.

### **3. Handling Transactions with Contractors:**

#### **Identifying the Owner:**
- **Contractor’s Documentation:** Since you have no direct contact with the truck owner and only deal with the contractor, the contractor should provide the necessary details and documentation.
- **Declaration from Contractor:** Ensure that the contractor provides a declaration regarding the number of vehicles they have. If the contractor has 10 or fewer vehicles, TDS should not be applicable.

#### **Practical Steps:**
1. **Obtain and Verify Declarations:** Obtain the required declarations from either the transport company owner or the contractor, depending on who is directly providing the service.
2. **Check Number of Vehicles:** Verify the number of vehicles operated by the transporter or contractor to determine TDS applicability.
3. **Document Everything:** Keep all declarations and documents related to the transport services and TDS deductions.

### **Summary:**
1. **Declaration Signature:** The declaration should be signed by the owner or an authorized representative of the transport company. If dealing with out-of-city/state transporters, ensure the declaration is from a person with authority.
2. **Transport Contractor:** If using a transport contractor who issues the LR, obtain a declaration from the contractor regarding their vehicle count. Debit the transport amount to the contractor’s account.
3. **Owner Identification:** In cases where you only deal with contractors, ensure the contractor provides valid documentation and declarations regarding the number of vehicles.

By following these guidelines, you will ensure compliance with TDS regulations and proper documentation of payments to transporters.

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