Tds on transportation of goods

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PANKAJ YADAV (Querist)
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09 September 2014 Respected sir,

We have purchased materials from a party who itself is providing the transportation facilty. Invoices for the material purchased and transportation of goods are received seperatly.

So my question is that whether we have to deduct tds while making payment of transport? and if yes at what rate?

What if we have taken PAN of the same party?

Thanking you in advance..

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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09 September 2014 if pan taken then no tds.......

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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09 September 2014 If transporter provides you PAN then TDS not required to be deducted. But the details of payment needs to be disclosed in TDS return. If PAN not provided then TDS needs to be deducted at penal rate of 20%.

PANKAJ YADAV

PANKAJ YADAV (Querist)
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11 September 2014 Ok, I understood now i dont have any question on the same.

Thanks to all..

PANKAJ YADAV

PANKAJ YADAV (Querist)
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17 September 2014 Sir,

With the same question mention above i want to add one more doubt which i am facing.
1. Whether we are liable to pay service tax on freight and transport under reverse charge. Party have not charge service tax for the same and not shown in invoice??
2. We are also taking transport facility from another GTA and same is charging service tax @3.09%.So in that case if I pay service tax directly to GTA along with the bill amount then whether we are still liable to pay service tax under reverse charge?

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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27 July 2025 Great questions! Let me clarify both points:

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### 1. **TDS on Transportation of Goods**

* If the transporter **provides PAN**, **no TDS** is required to be deducted on freight/transportation charges (even if paid separately).
* If **PAN is not provided**, TDS must be deducted at the **20% penal rate**.
* This is as per Section **194C(6)** of the Income Tax Act.
* You still need to disclose these payments in your TDS return, whether or not TDS is deducted.

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### 2. **Service Tax on Freight/Transportation Charges**

**Background:** Under Service Tax law (prior to GST), **Reverse Charge Mechanism (RCM)** applies on goods transport agency (GTA) services.

* **If the transporter is a GTA (goods transport agency):**

* If the transporter **charges service tax** on their invoice, you just pay them (no separate RCM).

* If the transporter **does not charge service tax**, then the recipient (you) is liable to pay service tax under **RCM**.

* **In your case:**

* For the transporter who **has not charged service tax**, **you must pay service tax under reverse charge**.

* For the other transporter (GTA) who **charges service tax @ 3.09%**, you pay service tax to them directly. **No further service tax payment is required under RCM** for this transaction.

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### Summary:

| Situation | Service Tax Payable By | Remarks |
| ------------------------------------------ | ------------------------- | ---------------------------- |
| Transporter (GTA) charges service tax | Transporter | You pay normal invoice + tax |
| Transporter (GTA) does NOT charge tax | Recipient (You) under RCM | You pay service tax directly |
| You pay service tax to GTA along with bill | No additional service tax | No further RCM liability |

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### Additional note:

* Since GST replaced service tax, now under GST:

* **TDS on GST payments** may be applicable if you are a government entity or other notified body.

* **Reverse charge applies** on transportation services by GTA to certain recipients, but mostly on unregistered transporters.

* You may want to check GST rules for the latest position.

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Let me know if you want help with GST side of things or any template for communicating with vendors!

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