LIVE GST Certification Course by CA Arun Chhajer. Register Now!!

TDS On freight Charges

CA Bikash Biswal (Chartered Accountant) (85 Points)

09 June 2010

Hello everybody

Can any one say whether TDS will be deducted on freight charges , If yes then write the notification, if no then why.

Reply
Follow
Share

5 Replies

Shyam Lal Naik (Service) (6156 Points)
Replied 09 June 2010

TDS applicable u/s 194C.

Interms of Section 194C, "work" includes carriage of goods or passengers by any mode of transport other than by railway.

Sanjeev kango (CA CS) (42 Points)
Replied 09 June 2010

yes it comes in preview of u/s 194 c but if transporter provides PAN then no deduction to be made otherwise higher deduction @ 20% to be made

CA Bikash Biswal (Chartered Accountant) (85 Points)
Replied 11 June 2010

Thanks for your reply

Dear

Actualy the contract is not made with the carrier, it is simply a verbal communication that the transporter will carry the material to destination. Is it come under TDS provision.

RITESH KOTHARI (B.COM, FCA, DISA(ICAI)) (778 Points)
Replied 11 June 2010

It will still come under TDS provisions, but if you are having PAN of the transporter, then there is no need to deduct TDS.

However, if you are not having the same, then TDS has to be deducted @ 20%.

Rajesh Maheshwari (prop) (47 Points)
Replied 12 June 2010

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.

This new subsection 6 of 194-C makes such transport contractor to compulsorily provide PAN to the Deductor, failing to which TDS will be made by Deductor as per 194C.

Applicability
This provision is applicable on payments made from October 01, 2009 to March 31, 2010. Such scenario should be determined by checking whether the Deductee has provided his PAN to the Deductor, during the payment.

New returns for such information
Deductor should furnish a separate return containing the details of Transport Contractors, who have provided PAN and TDS has not been made in accordance to subsection 6 of 194C. CBDT would be prescribing the format for such return and the methodology to file such return shortly. However it is expected to be one time activity for the Deductor to furnish these details after 31/03/2009, containing the information of all 6 Months.

Rate of TDS shall be if PAN is not provided from 1.10.2009 to 31.3.2010

1. 1% if the payee is individual or HUF.
2. 2% otherwise

After 31.3.2010 the rate shall be 20%.

End date of such provision
Even though the date 31/03/2010, the end date for this provision is not specified in amended 194-C section, the Financial budget documents of 2009, clearly indicated its termination by such date. It is expected that the forthcoming finance act 2010, will amend the section by removing the sub sections 6 and 7 of 194C.