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Does TDS apply for parcel service

Sasidhar Aruljothi (C.A FINAL) (187 Points)

07 December 2010

Friends,

Is TDS liable to be deducted in case of payment made to ABT parcel service, bill amount Rs.90,000/-. The parcel service company is not a regular contractor. Should we deduct TDS in this case? Or can we obtain the PAN number as it is a transport service?

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13 Replies

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 07 December 2010

yes its transporters catagory , TDS is applicable

Neeti (CA Final) (327 Points)
Replied 07 December 2010

Sashidhar , In my opnion , if the company is involved in Transpotation than u will have to obtain the PAN No. and TDS will not be deducted. You are also saying that there is no contract, if there is no contract than TDS will not be applicable in this case.

(Guest)

Originally posted by : dheeti
	Sashidhar , In my opnion , if the company is involved in Transpotation than u will have to obtain the PAN No. and TDS will not be deducted. You are also saying that there is no contract, if there is no contract than TDS will not be applicable in this case.

In my opinion Shashi dhar

TDS U/S 194 C payment limit not exceed of Rs.30,000 in a year you are not deduct TDS on this amount

if You are pay rs.90,000 in a year

TDS is deduct u/s 194 C bcoz you have pay 90,000 @ 2% of company cases and 1% Individual and HUf Cases

if Deductee have not pan no. tds deduct @ 20% on 90,000 it is applicable from 1.4.2010

Any suggestion in my comments are welcome

Regards

Rahul Sharma

Ashish Sharma (Service) (1028 Points)
Replied 07 December 2010

Hi, what is difference between service and contract? In 194C if we made payment more than 30000/- of a single invoice then we have to deduct TDS, sending any goods on urgent basis by courier with one invoice exceeding 30000/- can it defined as contract?

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 07 December 2010

when there is no contract then each invoice is deemed as contract, as it displays the value of service contracts and payment,

ravitheja (CA Final) (77 Points)
Replied 07 December 2010

In my opinion , If there is any specific contract between the parcel service and the assesse to transport the parcel , then u/s 194c the transaction is not liable for tds deduction . But if it is a general postage then 194c will apply and you have to deduct tax accordingly . But with the limited info you have provided me , its not transportation of materials but a general postage in the ordinary course of business 194c will be applied .

Nabeel (CA) (3288 Points)
Replied 07 December 2010

Yes, i think TDS will be applicable...

Prejith (Pursuing CA) (92 Points)
Replied 08 December 2010

To my magnitude TDS is applicable.

As for the applicability section 194C there is no requirement of an expressed contract as in case of transportation each GR itself is considered to be a contract u/s 194 C.

And please note TDS is not deductible on hiring or leasing goods carriages. Hiring or leasing goods carriages attract TDS u/s 194 I and so the same has been excluded from 194 C.

Therefore TDS is still to be deducted on carraige of goods.

Regards

Sasidhar Aruljothi (C.A FINAL) (187 Points)
Replied 08 December 2010

Its transportation of materials only Ravi

Sasidhar Aruljothi (C.A FINAL) (187 Points)
Replied 08 December 2010

Then, Prejit for all payments with regard to transportation, we should deduct tds? Since u say its transportation, can we obtain their Pan No., in case they have one and release payment without deducting TDS?

Sasidhar Aruljothi (C.A FINAL) (187 Points)
Replied 08 December 2010

Dheeti, the company has not entered into contract, checked it. Its like the paying company engages any parcel service to deliver the goods, which it thinks has better coverage over the desired destination.

Prejith (Pursuing CA) (92 Points)
Replied 08 December 2010

Yes. TDS shall be deducted on transportation of goods. Though the word “transportation” has been used in the amendment please interpret the word “transportation” as it gives clarity. Please do not just go by mere understanding of the word “transportation”.

Please note that from 01.04.2010 it is obligatory on the part of the party to quote PAN no matter what the transaction is and so in your case the party should have quoted his PAN. If the party has not quoted his PAN then TDS @ 20% shall be deductible.

Now, the doubt w.r.t contract should not arise as there is no need of a written agreement in place to deduct TDS. As I said earlier, in case of transportation each GR itself is considered to be a contract under Sec 194C.

Regards