Tds
Querist : Anonymous
whether tds deducted or not on freight because i do not know transporter whether he has PAN Yes or no?
value *****
ED ****
VAT ****
FREIGHT CHARTES*****
TOTAL ******
So if threshold limit is crossed you should deduct TDS. Yes even if PAN provided you should deduct TDS as that party is not a transporter.
So if you book the freight separately under Freight A/c deduct TDS on only such freight amount. In case you book the total amount as purchase TDS not required to be deducted.
Querist : Anonymous
Querist : Anonymous
Thanks & Regards
Querist : Anonymous
Thanks,
Rajiv
Querist : Anonymous
Thanks,
Rajiv
---
### 1) **TDS on Freight Charges Included in Purchase Tax Invoice**
* **TDS Deduction:**
When freight charges are part of a purchase invoice (separate or combined), and the threshold limit is crossed, **TDS should be deducted under Section 194C** (payment to contractors for transport services).
* **Whom to Deduct TDS From:**
Since the invoice is from the vendor (supplier) and not directly from the transporter, you deduct TDS **from the vendor**, as payment is made to the vendor.
* **PAN Consideration:**
Even if you don’t know whether the transporter has a PAN, since you pay the vendor, your obligation is to deduct TDS from the vendor.
* **If Freight is Booked Separately:**
Deduct TDS on freight amount under the vendor’s name.
* **If Freight is Part of Total Purchase Amount (not separately booked):**
No TDS deduction required on freight separately, as TDS on purchase is generally not applicable.
---
### 2) **Service Tax Liability on Freight Charges Included in Supplier’s Invoice**
* **Service Tax on Freight:**
As per **Service Tax law**, freight charges billed by the supplier (vendor) to the buyer are generally **liable for service tax**, and **the supplier is responsible to pay service tax**.
* **Buyer’s Liability:**
Buyer is generally **not liable** to pay service tax on freight charges included in the supplier’s invoice if supplier has charged it and paid accordingly.
* **Exception:**
If freight is separately billed by a transporter, service tax on such transport service is paid by transporter (supplier) or sometimes under reverse charge by recipient, depending on the case.
---
### Summary:
| Aspect | Responsibility |
| ---------------------- | -------------------------------------------------------------------------------------------- |
| TDS on Freight | Deducted from Vendor (not transporter) if freight is separately booked and threshold crossed |
| Service Tax on Freight | Paid by Supplier (vendor) if included in their invoice |
| PAN of Transporter | Not relevant for TDS if payment is to vendor |
---
### Case Law / Circular:
* There is no direct case law on this exact scenario easily available, but the CBDT circulars and Income Tax Act provisions on Section 194C clarify that TDS deduction is on payments to the person actually receiving the payment (vendor in this case).
* Regarding Service Tax, CBIC circulars and Service Tax Act guide the liability on freight charges.
---
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