TDS On Transporter

This query is : Resolved

Patel Sunil (Querist)
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07 November 2009 We receive freight Bill from the Party towards Freight charges for supply of materials which are purchased from the party on basis of Freight charges extra i.e party provide transportation. However the Party is in Trading Business & not in transporation Business

My query is that TDS should be deducted @ NIL rate or rate applicable u/s 194C?

CA.SHAHZAD SAYYED

CA.SHAHZAD SAYYED (Expert)
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07 November 2009 Dear Patel
if Party provide u transportation facility and charges extra for transportation in sale invoice then u need not to deduct TDS, it is duty of your vendore
However if Freight Bill is in your name and your vendore acts as an intermediary then you have to deduct TDS u/s 194C

Guest

Guest (Expert)

07 November 2009 As Provsion of Sec 194C Says Do not Deduct Tax whiile payment to TRANSPORTERS if they quote their PAN NO on Challan.

Now TRANSPORTERS includes person engaged in the business of plying, hiring or leasing of Goods carriage.

Now As per Definition Supplier of goods is not covered by definition & one has to deduct TDS as applicable rates specified in Sec 194C