Payment to truck owner through gta whether allowed or not.

This query is : Resolved

CA Rajneesh Dixit (Querist)
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17 April 2018 We are receiving bills from Transporter say GTA. Bills are booked under reverse charge.

Now Transporter says Sir Please do not Deduct TDS from our account and arrange payment in the name of Truck Owner. Truck owner is submitting his ITR accordingly.

Query:
A-Can Payment be made to Truck Owner against the bills of Transporter i.e. GTA??
B- If Payment can be made then can TDS not be deducted if declaration given by Truck owner with PAN that he is depositing TDS himself??

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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17 April 2018 Payment can't be made to Truck Owner against the bills of Transporter i.e. GTA

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RAJA P M

RAJA P M (Expert)
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17 April 2018 A - No... We can't pay to truck owner if bill is in the name of transporter. B - As per A no way for deduct TDS.

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CA Rajneesh Dixit

CA Rajneesh Dixit (Querist)
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27 April 2018 Why Payment can not be made to Lorry Owner. Original RC copy is received, Name of payee matched with Lorry owner as per RC. Is there any legal restriction on doing so??
Please help as I am in between to take decision to implement system.

RAJA P M

RAJA P M (Expert)
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27 April 2018 Dear.,
But., Your 1st query not cleared as per 2nd query... Am I right?

RAJA P M

RAJA P M (Expert)
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27 April 2018 The Truck Owner and the GTA owner is same and the GTA name is also the Truck owner's name then no more restriction for the Payment... You can pay as per Your view...

In case both (GTA and Truck Owner) are different then it's not applicable as per Your query...

First of clear these details...

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CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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28 April 2018 If truck owner raise the bill to you then you can pay directly to truck owner.

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CA Rajneesh Dixit

CA Rajneesh Dixit (Querist)
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28 April 2018 Transporter and Lorry Owner are different. Bilty is being raised by Transporter and Vehicle owner is supposed to get payment. We want to make payment directly to Vehicle owner. We will deduct TDS from Transporter.

For Eg ABC Transport arranges a Lorry from Andhra Pradesh to Uttar Pradesh. Ramesh is lorry owner. At the time of Unloading Ramesh asks for payment. We do NEFT after taking necessary papers to Ramesh.

We book entry as below

Freight Inward Dr
To ABC Transport
To TDS Payable

After NEFT to Ramesh we do
ABC Transport Dr
To Bank

Can we do So???
what is legal challenge??

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RAJA P M

RAJA P M (Expert)
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28 April 2018 First of generally Transporter give the services by his vehicles or rented* vehicles (In case it's from nearest transporter or lorry. Some lorry with Driver may be driver is the owner of lorry or anybody)
AFter completing supplies Lorry owner or Driver will be ask payment from the Service receiver.
We consider the Driver / Lorry Owner is the Transporter's staff and we paid the payment. Most of the cases we paid cash upto Rs. 30K. In case we paid cash no more confusion. Bcoz, We book directly to the Transporter's name.

Here,
You are paid to Ramesh. As per your reply You paid as NEFT to Ramesh. It think after considered with the transporter. So, no more problems about the transactions.

But,
If you are transferred the amount to Ramesh's Bank account then your entry is wrong as per my view...

RAJA P M

RAJA P M (Expert)
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28 April 2018 As per my view.,

If you are transferred the amount to Ramesh account....

i) Booking the expenditure with A Journal :
Dr. Transporting / Freight A/c - Rs. XXX
Cr. ABC Transporter A/c - Rs. XXX
ii) Payment :
Dr. Mr. Ramesh A/c - Rs. XXX
Cr. Bank A/c - Rs. XXX
iii) Adjustment Journal :
Dr. ABC Transporter A/c - Rs. XXX
Cr. Mr. Ramesh A/c - Rs. XXX

Note :
Main think detailed narration is required in transfers...

TDS not applicable if Contract - Transporter who has provided valid PAN.
If No / Invalid PAN then will be deduct @ 20% TDS u/s 194C

>>> GOOD LUCK <<<

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CA Rajneesh Dixit

CA Rajneesh Dixit (Querist)
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30 April 2018 Thanks for your valuable time and reply

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