transport service taken
This query is : Resolved
08 February 2017
Sir I have taken a transportation service and I have to pay Rs 45000 to him please tell whether I have to pay service tax and deducted Tds...... If yes than at which amount and how much
02 August 2025
Got it! Here’s a clear answer regarding your transportation service payment of Rs. 45,000:
---
### 1. **Service Tax Liability**
* **If the transporter is registered under Service Tax and charges service tax on invoice:**
* You pay the invoice amount (which includes service tax).
* No additional service tax needs to be paid by you.
* **If the transporter is NOT registered under Service Tax:**
* You may be liable to pay service tax under **Reverse Charge Mechanism (RCM)** on the transportation service.
* You will pay service tax on Rs. 45,000 at the applicable rate (e.g., 15% including cess if GST was not implemented at that time).
---
### 2. **TDS (Tax Deducted at Source) on Transport Service**
* As per Income Tax rules, when you pay for transportation services, you **need to deduct TDS under Section 194C** (Contractor payments).
* **TDS rate:** 1% if the payment is to an individual/HUF, or 2% if payment is to a company or others.
* **TDS to be calculated on the amount excluding service tax.**
Example: If the Rs. 45,000 is only for transportation service (excluding service tax), deduct TDS on full Rs. 45,000.
If the Rs. 45,000 includes service tax, deduct TDS on the amount excluding service tax.
---
### Summary:
| Situation | Service Tax Payable By | TDS Deduction Required? | TDS Rate |
| ---------------------------------------------- | ------------------------------------------- | --------------------------------- | -------- |
| Transporter registered and charges service tax | You pay full invoice including service tax | Yes, deduct TDS on taxable amount | 1% or 2% |
| Transporter NOT registered under service tax | You pay service tax under RCM on Rs. 45,000 | Yes, deduct TDS on Rs. 45,000 | 1% or 2% |
---
If you want, I can help you with the exact TDS calculation based on transporter status and payment breakup.
Do you know if the transporter is registered under Service Tax and charges tax on the invoice?
---
### 1. **Service Tax Liability**
* **If the transporter is registered under Service Tax and charges service tax on invoice:**
* You pay the invoice amount (which includes service tax).
* No additional service tax needs to be paid by you.
* **If the transporter is NOT registered under Service Tax:**
* You may be liable to pay service tax under **Reverse Charge Mechanism (RCM)** on the transportation service.
* You will pay service tax on Rs. 45,000 at the applicable rate (e.g., 15% including cess if GST was not implemented at that time).
---
### 2. **TDS (Tax Deducted at Source) on Transport Service**
* As per Income Tax rules, when you pay for transportation services, you **need to deduct TDS under Section 194C** (Contractor payments).
* **TDS rate:** 1% if the payment is to an individual/HUF, or 2% if payment is to a company or others.
* **TDS to be calculated on the amount excluding service tax.**
Example: If the Rs. 45,000 is only for transportation service (excluding service tax), deduct TDS on full Rs. 45,000.
If the Rs. 45,000 includes service tax, deduct TDS on the amount excluding service tax.
---
### Summary:
| Situation | Service Tax Payable By | TDS Deduction Required? | TDS Rate |
| ---------------------------------------------- | ------------------------------------------- | --------------------------------- | -------- |
| Transporter registered and charges service tax | You pay full invoice including service tax | Yes, deduct TDS on taxable amount | 1% or 2% |
| Transporter NOT registered under service tax | You pay service tax under RCM on Rs. 45,000 | Yes, deduct TDS on Rs. 45,000 | 1% or 2% |
---
If you want, I can help you with the exact TDS calculation based on transporter status and payment breakup.
Do you know if the transporter is registered under Service Tax and charges tax on the invoice?
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