TDS on Freight payment

3382 views

Save Share

Join Us Follow Us Add as Source

anil kalia

chartered accountant

33 Points Posted on 08 December 2009

anil kalia

( Author )
07 December 2009

Query

A firm is making freight payments against GR issued by different truck operators. The payments are being made to the drivers on trip to trip basis.
In none of the case GR amount exceeds Rs.20,000/- and the aggregate payment made to each truck during the year is also below Rs.50,000/- and accordingly
no TDS is being deducted.

In few cases the truck operators are member of a Truck Unions and such truck operators are issuing GR of Truck Union, of which he is a member and are mentioning there truck number in the GR. However they are collecting the freight them self.

As per trade practice, such truck operators are not depositing the freight collected with the Union, but are only paying there membership fee to the union. A truck union is having members who own different trucks and operate under the banner of Truck Operator Union.

Please advice whether aggregate amount paid to different truckers operating under one truck operator union will be considered to determine the aggregate amount exceeding Rs.50,000/- or payment made to each truck operating under one union will be considered to determine the limit of Rs.50,000/-.

Anil K Kalia
FCA, Chandigarh

Replies (4)

Anumanchipalli Sathikonda

Tax Consultant

1504 Points Posted on 22 January 2010

Mr.Anil Kalia

If the asessee does not deduct tax at source on the bills issued by the Union's Bill Book, the assessee has to first convince his tax auditor regarding the facts and circumstances.

At the time of scrutiny the Assessing Officer will propose to disallow the impugned payments by invoking the provisions of section 40. Then the assessee has to provide all material and confirmations from each truck owner and also from the union to the effect that though the bills are issued on union's bill book, in fact the impugned amount belongs to the truck owner. The assessing officer may or may not accept the assessee's explanation. Then the assessee has to prefer an appeal.

Why I have explained the above, the facts and circumstances of your case are debatable.

Best Wishes

Sathikonda

CA Lovenish Bansal

JOB

314 Points Posted on 22 January 2010

We should consider latest amendments in regard to transporter's TDS.

Regd

Lovenish Bansal

Anumanchipalli Sathikonda

Tax Consultant

1504 Points Posted on 23 January 2010

Mr.Lovenish Bansal

There is no solutionj to Anil Kalia's problem in the new amendments also. Please go through new section 194C which has come into force with effect from 1-10-2009.

Best Wishes

Sathikonda

Anumanchipalli Sathikonda

Tax Consultant

1504 Points Posted on 12 February 2010

Dear All

I have today come across a case law which may be useful in the situation we discussed herein. I am attaching the case law. Let's continue the discussion in the light of the case law.

Best wishes

Sathikonda