Tds on lorry freight

sir/madam,

During the financial year 2013-2014 my client had paid lorry frieght less than 35000/- and more than 35000/- on  paid basis as well as to pay basis. the client had not deducted tds on lorry frieght for paid basis as well as pay basis and he had not filed any tds returns for lorry freight. There are 3-5 regular transporters who are arranging the vehicles on daily requirement but differenet vehicles as per their requirement. the client not made any agreement to any of the transporters. and he had not paid any commission to the transporters. the transporter is collecting commission from the vehicle owner/drivers on day to day basis.

my question is  whether i have to deduct on paid basis freight or to pay basis freight?.

whether tds is applicable or not ?

if yes on which amount i have to deduct tds (either paid basis / to pay basis) ?

at what percentage  of amount on tds ?

whether any tds returns should be filed or not?

whether is there any later cirucualr on tds ?

pls clarify me ?

Replies (1)

Dear Satyanarayana

Payments made to goods carraige contractor do not attract TDS as per Sec.194C(6) PROVIDED you obtain the PAN of such transporter.

However, you have to report the PAN collected  and the gross payment made in respect of such transporter in your quarterly e-TDS Return by flagging the reason for NIL deduction as payment made to transporter. 

If the transporter fails to provide the PAN, you will have to deduct the TDS @ 20%.

Also, as per second proviso to Sec.40A(3A), you are not supposed to make a payments in cash of more than Rs.35,000 on a single day to a transpoter.

Regards

Ajay

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