Bijoy (Manager Audit ) (38 Points)
14 June 2010
As per the contract with suppliers, my company have to reimbursement 25% of the freight incurred by them to send materials to us. We are Claiming this expense under the head “Freight Charges” and the supplier providing Debit Notes to support our Claim.
Please let me know that this transaction will cover Sec 194C (Transport Contract) of Income tax Act and there no need to deduct tax from source if my supplier furnishes his PAN number.
CA VINAY BANSAL
(In job with KPMG)
(289 Points)
Replied 14 June 2010
No deduction shall be made from any sum credited or paid or likely to be credited or paid during the previous year to the account of a contractor during the course of business of plying, hiring or leasing goods carriages, on furnishing of his Permanent Account Number, to the person paying or crediting such sum.
(an assessee, who is in possession of a goods carriage, whether taken on hire purchase or on instalments and for which the whole or part of the amount payable is still due, shall be deemed to be the owner of such goods carriage.]
In the case told by u, the assessee is not having the ownership of the vehicles rendered on hire. Thats y, he cant claim the benefit of this section. This section is specially applicable to those assessees who owns the vehicles or had taken the vehicles on hire purchase or financing scheme.
(Refer sec 194C in Incometax bare act and also explanation to that Point L(ii).
JITENDRA KUMAR DHINGRA
(Executive)
(93 Points)
Replied 14 June 2010
since ur company has entered into the contract with the transporter, u r reimburisng 25% and rest 75% is charged by them,but liability to deduct tds has been removed on making payment to transporter from the assessment year 2010-11.therefore no liability has arisen on ur part.
CA Chirag
(Chirag Sheth & Associates)
(1183 Points)
Replied 14 June 2010
yes agree with jitendra kumar. there is not any requirement to deduct TDS provided the transporter is having PAN.
| Originally posted by : Chirag | ||
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yes agree with jitendra kumar. there is not any requirement to deduct TDS provided the transporter is having PAN. |
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STRONGLY AGREE WITH CHIRAG
Badal Paswan
( STUDENT)
(66 Points)
Replied 17 June 2010
What is the maximum limit of Freight charged to be liable for dedut the TDS, because in new rules if the PAN card is shown the TDS should not be deducted, is it any rules for single or maximum limit of any bill of Freight to be deduct the TDS ?
CA Chirag
(Chirag Sheth & Associates)
(1183 Points)
Replied 17 June 2010
There is not any monetary limit which is applicable in case of Transporter case.
suryasasithakumar
(audit assistant)
(29 Points)
Replied 02 December 2010
HI FRDS,
PL FIND ANSWER FORTHIS
.A Ltd has purchased goods worth Rs 1 lakh from B Ltd. B Ltd has charged freight charges Rs 1,000 and shown separately in invoice. Should A Ltd deduct TDS on the freight charges?
WILL B LTD STILL BE CALLED AS CONTRACTOR FOR TRANSPORT AS TRANSPORT IS NOT ITS
ROUTINE BUSINESS...
sidhant
(Accountant)
(24 Points)
Replied 16 April 2011
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