TDS Applicability

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This query is : Resolved

Guest

Guest (Querist)

26 June 2010 Dear Sir,

This is regarding the TDS applicability as per Sec194 C
As per clause 6, "No deduction shall be made from any sum credited or paid or likely to be credited or paid during the previous year to the account of a contractor during the course of business of plying, hiring or leasing goods carriages, on furnishing of his Permanent Account Number, to the person paying or crediting such sum."

Fact of the case:
We have given a contract for supply where it is mentioned that the freight will be paid which is fixed on weight basis.
Supplier has raised two bills seperately for Supply part and for Freight Amount as per contract whereas transportation is done by third party.
Also Supplier has furnished his PAN to us.

Query:
We need clarification whether TDS shall be deducted on the Freight Amount even when supplier has submitted his PAN.

mohinder kansal

mohinder kansal (Expert)

27 June 2010 in my view, in this case tax is deductible at source as as per section 194C(7) prescribed particulars are to be submitted to the presecribed authority. although till now this is not prescribed, but considering the previous law truck owner's detail shall be provided to the department which supplier of goods can only provide as he will make the payment to truck owner.
in my view if single contract of supply is executed on FOR basis, TDS shall not be deductible.