Tds on loading & unloading charges

This query is : Resolved

Guest

Guest (Querist)

25 January 2012 the contractor makes consolidated bill:

frieght=40,000
loading & unloading charges=6,000
GR charges =600

whether TDS is deductable u/s 194C on loading & unloading charges & GR charges.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
Follow

25 January 2012 According to me in the given scenario TDS needs to be deducted on total bill amount u/s 194C.
Wait for views of other experts.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
Follow

26 January 2012 As the amount is separately mentioned in the bill , and sub section (6) of Section 194C prescribes for non deduction in the case , when PAN is furnished by the contractor, TDS has to be deducted on the amount excluding the freight charges.

Message likes : 1 times

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
Follow

26 January 2012 Thank you Paras Sir..Just a further query..

If in a bill reimbursement expenses is mentioned separately then whether TDS shall be deducted on amount excluding the reimbursement amount?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
Follow

26 January 2012 Since the expenses included in the bill are inherent in carrying out the work , the same can be treated as an essential part of the work or service and accordingly TDS is applicable on the entire bill amount.
.

Message likes : 1 times

Guest

Guest (Querist)

26 January 2012 thanks sir,
just a further query...
if a contractor issue a bill showing
Freight =60,000 + 6,000=66,000. of which 6,000 is loading & unloading charges which is not written in bill.

then TDS has to be deducted loading & unloading.

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)
Follow

27 July 2025 Great question! Let’s break this down clearly:

---

## 🔍 **Scenario Recap**

* A **consolidated bill** from a contractor is received with the following breakup:

* **Freight** = ₹60,000
* **Loading & Unloading Charges** = ₹6,000 (included within the freight, not shown separately)
* **Total Bill** = ₹66,000
* The query: Is **TDS applicable on loading & unloading charges**, especially when not itemized?

---

## ✅ **Relevant TDS Provision: Section 194C** – **Payment to contractors**

Section 194C applies **to any work contract**, including transportation (if not exempted), loading/unloading, packaging, etc.

However, there’s an **exemption under Section 194C(6)** for **freight/transportation payments**, **if the payee provides a valid PAN**.

---

### 🔍 TDS Applicability in This Case

1. **If freight and loading/unloading are itemized separately in the bill**:

* **Freight**: No TDS u/s 194C, **if PAN is provided by transporter** (per Sec 194C(6)).
* **Loading & Unloading**: TDS **is applicable** u/s 194C at **1% or 2%**, as it’s considered a **contractual job**.

2. **If NOT itemized separately** (as in your follow-up query — entire ₹66,000 shown as freight):

* Then the **entire amount is treated as transportation/freight**.
* In this case:

* **If PAN is provided by transporter**, **no TDS is required** on ₹66,000 (as per Section 194C(6)).
* If **PAN is NOT provided**, TDS @ **20%** is applicable on the entire amount.

---

## 🧾 Final Answers:

### 🔹 If loading/unloading charges are:

| Shown Separately | PAN Available | TDS Deduction |
| ---------------- | ------------- | ------------------------------------------- |
| **Yes** | Yes | TDS on loading/unloading only (not freight) |
| **No** | Yes | No TDS on full bill (treated as freight) |
| **No** | No | TDS on full bill @ 20% |

---

## ✅ Summary:

> If **loading & unloading is not separately mentioned**, and the **transporter provides PAN**, then **no TDS** is required under **Section 194C(6)** on the entire ₹66,000 bill.

Let me know if you need a draft TDS calculation or sample wording for the bill or PAN declaration!

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now