Tds on transporter
This query is : Resolved
Guest
Guest
(Querist)
01 April 2012
ONE OF THE VENDOR IS DECLARING ITSELF AS A TRANSPORTER.THE AGREEMENT WITH THE TRANSPORTER IS OF DOOR TO DOOR EXPRESS CARGO DELIVERY.THE TRANSPORTER IS NOT CHARGING SERVICE TAX & THE CO. PAYING FREIGHT IS DEPOSITING ON HIS BEHALF.
ACC. TO ME IT ATTRACTS TDS.BUT THE TRANSPORTER IS SAYING IT IS COVERED U/S 194C(6).PLEASE ADVICE ME OF THE ABOVE ISSUE?
ACC. TO ME IT ATTRACTS TDS.BUT THE TRANSPORTER IS SAYING IT IS COVERED U/S 194C(6).PLEASE ADVICE ME OF THE ABOVE ISSUE?
CA MANOJ GUPTA
(Expert)
01 April 2012
u get all the details from transporter as prescribed under section 194C(6) and then fulfill the requirements of section 194C(7)
08 April 2012
No you have to pay TDS and service tax both and to do so get the details from the concerned party
Guest
Guest
(Querist)
25 April 2012
please guide me what details to be obtained from party. & please help me how to prove the party that TDS is applicable on them.
27 July 2025
Got it! Here’s a clear explanation and steps for your transporter TDS issue:
---
### TDS on Transporters (Section 194C(6) & (7))
**Background:**
* Under **Section 194C(6)**, transporters who fulfill certain conditions are **exempt from TDS deduction** by the payer.
* For this exemption, the transporter must provide **a declaration in Form 10E** along with their PAN.
* The declaration must state that they are engaged in the business of transport by road and that they have not subcontracted the work to others.
* The payer must verify and maintain these documents to claim exemption from deducting TDS on transport charges.
---
### What details you should obtain from the transporter (to claim exemption under Sec 194C(6)):
1. **PAN of the Transporter** (mandatory)
2. **Declaration in Form 10E** signed by the transporter stating:
* They are a transporter engaged in the business of transporting goods by road.
* They have not sub-contracted the contract work.
3. **Address and other contact details** for record-keeping.
---
### What if the transporter does not provide Form 10E?
* If transporter **does not provide Form 10E**, **TDS @ 1% (if transporter has PAN) or 20% (if no PAN)** must be deducted under Section 194C on the freight payment.
* You can’t skip TDS deduction unless you have the transporter’s declaration (Form 10E).
---
### Regarding Service Tax:
* Service tax on transportation of goods by road is usually payable by the transporter.
* If the transporter **is not charging service tax**, and you (the company) are depositing service tax on their behalf (reverse charge), this is independent of the TDS provisions.
* **TDS on transport charges is separate from service tax liability**.
---
### How to explain/prove to the transporter that TDS is applicable?
* Refer them to **Section 194C** of the Income Tax Act, which mandates deduction of TDS on payments made to contractors including transporters.
* Mention that **exemption under Section 194C(6)** is only possible when they submit the declaration in Form 10E.
* If the transporter refuses to provide Form 10E, you are **legally obligated to deduct TDS**.
* You can share CBDT circulars or Income Tax guidelines on TDS on transporters to back your claim.
---
### Summary for you:
| Scenario | TDS Action |
| ----------------------------------- | ----------------------------- |
| Transporter provides PAN + Form 10E | No TDS deduction needed |
| Transporter provides PAN only | Deduct TDS @ 1% |
| Transporter no PAN | Deduct TDS @ 20% (penal rate) |
---
If you want, I can help draft a format for requesting Form 10E from your transporter or share official circular references.
Would that be helpful?
---
### TDS on Transporters (Section 194C(6) & (7))
**Background:**
* Under **Section 194C(6)**, transporters who fulfill certain conditions are **exempt from TDS deduction** by the payer.
* For this exemption, the transporter must provide **a declaration in Form 10E** along with their PAN.
* The declaration must state that they are engaged in the business of transport by road and that they have not subcontracted the work to others.
* The payer must verify and maintain these documents to claim exemption from deducting TDS on transport charges.
---
### What details you should obtain from the transporter (to claim exemption under Sec 194C(6)):
1. **PAN of the Transporter** (mandatory)
2. **Declaration in Form 10E** signed by the transporter stating:
* They are a transporter engaged in the business of transporting goods by road.
* They have not sub-contracted the contract work.
3. **Address and other contact details** for record-keeping.
---
### What if the transporter does not provide Form 10E?
* If transporter **does not provide Form 10E**, **TDS @ 1% (if transporter has PAN) or 20% (if no PAN)** must be deducted under Section 194C on the freight payment.
* You can’t skip TDS deduction unless you have the transporter’s declaration (Form 10E).
---
### Regarding Service Tax:
* Service tax on transportation of goods by road is usually payable by the transporter.
* If the transporter **is not charging service tax**, and you (the company) are depositing service tax on their behalf (reverse charge), this is independent of the TDS provisions.
* **TDS on transport charges is separate from service tax liability**.
---
### How to explain/prove to the transporter that TDS is applicable?
* Refer them to **Section 194C** of the Income Tax Act, which mandates deduction of TDS on payments made to contractors including transporters.
* Mention that **exemption under Section 194C(6)** is only possible when they submit the declaration in Form 10E.
* If the transporter refuses to provide Form 10E, you are **legally obligated to deduct TDS**.
* You can share CBDT circulars or Income Tax guidelines on TDS on transporters to back your claim.
---
### Summary for you:
| Scenario | TDS Action |
| ----------------------------------- | ----------------------------- |
| Transporter provides PAN + Form 10E | No TDS deduction needed |
| Transporter provides PAN only | Deduct TDS @ 1% |
| Transporter no PAN | Deduct TDS @ 20% (penal rate) |
---
If you want, I can help draft a format for requesting Form 10E from your transporter or share official circular references.
Would that be helpful?
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