Tds u/s 194 c

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

08 January 2013 when a unit is paying worker as loading charges ...will tds u/s 194 c be applicable ?
and there is no such contract with them .

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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08 January 2013 If the limit prescribed under section 194C crosses then TDS will be deducted.

Querist : Anonymous

Querist : Anonymous (Querist)

08 January 2013 thanx for the reply ..but further to add on it ..will there be any service tax implication as per cargo handling services ..?

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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28 July 2025 Here’s a detailed take on your query about **TDS under Section 194C** and **Service Tax implications** for loading charges paid to workers:

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### 1. **TDS under Section 194C on Loading Charges to Workers**

* **Section 194C** applies to payments made to contractors for carrying out any work (including supply of labor for carrying out work).
* Loading charges paid to workers or laborers generally **qualify as contract work** if there is a contract or agreement.
* However, you mentioned **no contract exists** with these workers.
* **Is TDS applicable without a contract?**

* Even in the absence of a formal written contract, if there is a payment for carrying out any work or service, TDS under Section 194C is applicable once the payment crosses the threshold limit (₹30,000 per contract or ₹1,00,000 in aggregate during the year).
* So, if the payment to a worker for loading exceeds the prescribed limits, TDS should be deducted.

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### 2. **Service Tax Implication on Cargo Handling / Loading Charges**

* Service Tax (now subsumed under GST but applicable pre-GST) was levied on **cargo handling services**.
* **Cargo handling services** include loading/unloading of goods at any place.
* If the workers are carrying out such services on your behalf (especially if hired through a contractor or as a service), **service tax was applicable** on the value of such services.
* If these workers are your own employees (on your payroll), service tax is generally **not applicable** on their wages.
* If payment is to an independent service provider (contractor), service tax liability exists on the service provider, and **reverse charge** might apply to you in certain cases.

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### Summary:

| Payment to Workers for Loading | TDS under 194C | Service Tax Applicability |
| ------------------------------- | ------------------------------------------------- | ------------------------------------------------- |
| No contract, direct payment | TDS applicable if limits exceeded | Usually not applicable if workers are employees |
| Payment to contractor | TDS applicable as per limit | Service tax applicable on cargo handling services |
| Payment without formal contract | TDS still applicable if payment crosses threshold | Depends on nature of payment and service provider |

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### Practical advice:

* Even if no written contract exists, deduct TDS if payments exceed limits.
* For service tax (pre-GST), verify if service provider is liable or if reverse charge applies.
* Post-GST, loading/unloading may attract GST, so check applicability under GST law.

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If you want, I can help you draft TDS entries or advise on compliance steps for service tax / GST related to cargo handling. Want me to do that?

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