Tds on transport charges

ASHOK KUMAR MODI (ACCOUNTS EXECUTIVE) (43 Points)

01 June 2015  

Dear Sir,

TDS from payments to transporters–Section 194C

Previously, payment to transporters carrying on the business of plying, hiring or leasing of goods carriages is not liable to withholding tax if the transporter furnishes her/his permanent account number to the payer. It seems that the intention of having this provision was to exclude small transporters from the rigours of TDS provisions. But because of the way the section was drafted, all transporters were excluded from the TDS provisions if they had a PAN.

With a view to bring back the big transporters back into the TDS fold, from 1st June 2015 onwards, this exemption will be available only to those transporters who own ten or less goods carriages at any time during the previous year. Such a transporter would also need to furnish a declaration to that effect to the payer along with the PAN.

If we pay freight to a Transport contractor who is hiring hundreds of trucks from truck owners and he is not owner of the truck. Is he liablie to be deducted TDS.

Thanks & Regards

Ashok Kumar Modi