TDS on Freight by Contractor

Please give me expert openion on applicable TDS % (2% or 1%) under the following situation.

Company A has given a contract (with material) to a construction Co. X for construction of A's Building. Co. X is buying the required construction material and paying it's freight to the transport agencies. Now Co. X will deduct TDS @ 1% against freight payment (like it does for it's subcontractors) or  @ 2% (as under normal circumstances a buyer deducts for transportation of its goods) ?

regards 

Replies (1)

In this case X has to deduct TDS @ 2% plus cess & sch. Here the transporter is a contractor to X, as Co. A has given the contract to X for construction of building. But, if it's a cost plus contract between X and A, then the transporter can be treated as sub-contractor of X, and in that case TDS will be @ 1%

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