TDS on Courier charges

This query is : Resolved 

06 October 2010

Dear Experts

Our company is paying courier charges to one company for carriage of small packets of finished goods to different parts of India. Regarding the TDS on such payments, the courier company's contention is that no TDS is required on such payments since it is covered by the exemption u/s 194C from 01.10.2009 onwards.
My doubt is whether exemption for TDS on freight (on submitting the PAN of the transporterto Payer)can be extended to a courier company which transports small packets of different customers by road???

Kindly resolve



O.D.SHARMA (Expert)
07 October 2010

No ,Courier charges are not exempted.TDS to be deducted

07 October 2010

I am agreed with the views expressed by Mr. O.D.Sharma. A courier co. is totally different from goods transport operater in terms nature of operations.The company is not primarily engaged in the business of plying, hiring or leasing goods carriages rather it is engaged in the business of movement of goods or parcels from one place to other place. This movement can be by road, air, water or any other means. So this company uses the transport as a means to move the goods and thus it can not be called as a goods transport operator.When you go to a courier co., you do not hire a space in a truck. Your contact is limited to safe delivery of goods which can be by any mode of transport. TDS u/s 194C is applicable on a courier company because it is not a tranport company or operator.

Views by CA.Abhishek Gupta

venkatraman shrinivas (Expert)
07 October 2010

Indeed section 194C applies to courier as they cannot be equated to truck operators who need not be subjected to TDS if they furnish their PA number.Else they can apply to their TDS assessing Officer and obtain a no deduction or lesser deduction certificate. Otherwise you are obliged to deduct tax and fir failure you are liable not only the tax due, but also interest besides penalty under section 271C of the Act. Beware'

19 October 2010

The payment of courier charges is covered u/s 194C.Hence, if the total payment to the courier Agency for the entire year does not exceed the ceiling limit of Rs. 75,000/- w.e.f. 1/07/2010, then there is no need to deduct the TDS. However, the courier Agency Service cannot be equated as the Transporter. Thus, simply providng PAN , the Courier Agency cannot ask not to deduct the TDS. It is your responsibility to comply the provisions of TDS including the Deduction, deposit , filing of return and furnishing of the TDS Certificate to the deductee.

10 January 2012

Dear All my question is:

If the courier party is using our invoice what will be the tax implication i.e TDS still needs to be deducted or not ?

Pls revert on urgent basis

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