TDS ON Freight

TDS 6053 views 10 replies

john

LEARNER

554 Points Joined November 2009

ACCUTALLLY ASKED BY MANISH

We purchases steel material from suppliers. Transportation arranges by suppliers and deliver goods to our factory. They charge freight at fixed rate per M.T as per order terms as follows :

Steel : 20 M.T x Rate 30000/- = 600000
Add : Excise 61800
Add : - CST 13236
Add: Freight charges 20000
(1000/- per M.T)
Total : 695036
My query is whether TDS should be deducted on such freight charges of Rs. 20000/-?

As per new amendment,TDS is not applicable on transporters if they provides PAN.

In this case what would be the treatment for TDS deduction as suppliers are not transporters but merely arrange transportation and charge freight in their Sale Invoice.

BE NOTED THAT THE FREIGHT AMOUNT IS CHARGED AT FIXED RATE AND IT IS NOT IN KIND OF ACTUAL REIMBURSHMENT.

ACCUTALLLY ASKED BY MANISH

Replies (10)

Ram Avtar Singh

Nagari Sultanpur U.P.Delhi

15158 Points Joined March 2007

Its your purchase cost. Not cartage. so no TDS attract on sale purchase

Ashish Sharma

Service

1028 Points Joined March 2009

As per the amended section 194C, through Finance Act (2) of 2009, No deduction shall be made from any payments made to a contractor during the course of business of plying, hiring or leasing goods carriages, on furnishing of his PAN to the deductor.

So as per my view the TDS will deduct by the supplier coz he will come under above provision. as he is hiring the transport.

waiting for expert view also

CA KHAN AURANGZAIB

ERP FINANCIAL CONSULTANT

85 Points Joined March 2010

Apart from above answer, TDS will not be deducted because of section 192C provide " any amount paid to Contractor" in this case your company not directly paid to contractor or conctract ( whether formal or informal ) made is not with your company.

Hence tds will not be applicable.

Pradeep Kadam

PROFESSIONAL

21 Points Joined November 2009

i am agree with ashish sharam becoz it is a supplier's liabilities he hire transpoter not you

Ankit CA and CS

Manager - Accounts

204 Points Joined May 2010

TDS is not atttracted in this case t is just ur inward cost....

vikash rathi

Chartered Accountant

787 Points Joined March 2008

it is just inward cost......no liability of tds ..its on supplier to deduct tds from transporter...if applicable...as if transporrter quote pan then supplier also dont need to deduct tds........

salman ahmad

internal auditor

21 Points Joined November 2009

It is pertinent to know in whoose name Bilty is issued i.e. Consignor/Consignee.Irrespective of accounting treatment to capitalise or not, TDS libilty is seprate issue.

If PAN no. of supplier is not avilable, need to deducted TDS on freight.

Salman Ahmad

Sultanpur(UP)

TRILOCHAN

SENIOR ACCOUNTANT

698 Points Joined May 2008

Its your purchase cost. Not cartage. so no TDS attract on sale purchase

termpapers

Manager

30 Points Joined May 2010

Steel : 20 M.T x Rate 30000/- = 600000
Add : Excise 61800
Add : - CST 13236
Add: Freight charges 20000
(1000/- per M.T)
Total : 695036

Term Papers

Edinburg

SEO

22 Points Joined June 2010

If any contract value exceeds Rs 20,000 or Rs. 50,000 in the aggregate during the financial year, you must deduct TDS at 2.06% of the payment if payment to contractor (for contracts other than advertising contracts). (Exception: Individuals and HUF whose sales/gross receipts in business is less than Rs 40 lacs or professional receipts is less than Rs 10 lac are not required to deduct the TDS).Intermodal Services