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)
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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)
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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.

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CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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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)
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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.
.

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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 online

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

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## 🔍 **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?

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## ✅ **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**.

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### 🔍 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.

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## 🧾 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% |

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## ✅ 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!

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