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TDS ON TRANSPORTER - 194C

Sorabh Gupta (Manager ( Taxation )) (877 Points)

12 October 2009

Dear All

As you all know the rate of TDS u/s 194C has been changed ie. 1% on HUF/Indl & 2% on company. And same is the case of transporter if transporter does not provide the PAN NO. Can any body tell me that what is the definition of "TRANSPORTER" for this purpose .

In other words, IS IT include C&F Charges , Loading & unloading , Payment of custom duty, stamp duty, N form, agency comission, Octroi, container & warehouse ch. etc ?????

PLEASE GIVE YOUR VALUABLE VIEWS IN DETAILS..........

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13 Replies

mohit mehta (article) (87 Points)
Replied 12 October 2009

yes you are absolutely right The Finance Budget 2009 presented on 06.07.2009 has made in the changes in Section 194C

now if the transporter provides his PAN no tds is to be deducted on payments made to him, in case if he does not provide his PAN then TDS is to be deducted at 1% for Ind/HUF and 2% for Firm/ Company.

Now as regards the definition of Tranporter it means a person engaged in plying, hiring or leasing of trucks and does not include payment for other transportation means used.

Regards

Mohit

Sorabh Gupta (Manager ( Taxation )) (877 Points)
Replied 12 October 2009

Dear Mohit

Thanks for your views But generally if we make contract with transporter then it is inclusive of C&F OR loading & unloading..................?????????????????

sivaram (Asst Mgr-Taxation) (6918 Points)
Replied 12 October 2009

Contract with the Transporter alone is covered in this category and not the contract with C&F who incurs the transport charges and gets reimbursed .sorry sir I am not an expert still placed my views on the same

Sorabh Gupta (Manager ( Taxation )) (877 Points)
Replied 12 October 2009

Sivarama

It is appreciable that even you can try to answer................But dear still it is in bucket of confusion. I need some more views from you people.............

mohit mehta (article) (87 Points)
Replied 13 October 2009

Dear Sourabh

With due regards, while interpretating law we have to be very specific unless the law itself generalise its application. This exemption is only for transportation contract and not any multiple contract entered along with, so if you are availing any other service along with a general transportation contract then you are left with only two option

1. Either ask your vendor to raise separate bills for the transportation contract and other services

2. Or deduct TDS at 2% / 1%

same procedure is opted under service tax where a covered and un covered service is obtained or rendered

PRAVEEN KUMAR (MBA (Finance) B.Com.(P)) (3443 Points)
Replied 24 October 2009

Hi Sorabh,

As section 194C Substituted by the Finance (No. 2) Act, 2009, w.e.f. 1-10-2009 which provided vide subsection 6 that tax shall not be deducted in case of plying,hiring or leasing of goods carriage if person who is paid for such services furnishes PAN to person paying sums. Read the exact wordings below

(6) No deduction shall be made from any sum credited or paid or likely to be credited or paid during the previous year to the account of a contractor during the course of business of plying, hiring or leasing goods carriages, on furnishing of his Permanent Account Number, to the person paying or crediting such sum.

What is Goods carriage?

Clause (14) and clause (16) of section 2 of the Motor Vehicles Act, 1988, define “goods carriage” means any motor vehicle constructed or adopted for use solely for the carriage of goods, or any motor vehicle not so constructed or adopted when used for the carriage of goods;’

Conclusion

Therefore, it becomes clear that only in case of Goods Carriage plying or leasing or hiring, TDS may not be applied if the contractor of gooods carriage provides payer his/her PAN. Other transporters are still covered u/s 194C.

In other words, loading unloading or transportation of employees are not covered under subsection 6 which exempts certain payments from TDS levy.

However, I feel if the loading and unloading is made part of work of Goods Carraige, consolidated payments i.e payment for goods carriage as well as loading unloading shall also be covered u/s sub-section 6 of section 194C and TDS may not happen on those payments.

Originally posted by :Sorabh Gupta

Dear All
As you all know the rate of TDS u/s 194C has been changed ie. 1% on HUF/Indl & 2% on company. And same is the case of transporter if transporter does not provide the PAN NO. Can any body tell me that what is the definition of "TRANSPORTER" for this purpose .
In other words, IS IT include C&F Charges , Loading & unloading , Payment of custom duty, stamp duty, N form, agency comission, Octroi, container & warehouse ch. etc ?????

PLEASE GIVE YOUR VALUABLE VIEWS IN DETAILS..........

aruna (EXECUTIVE FINANCE) (24 Points)
Replied 03 November 2009

WHAT IS THE DEFINITION OF TRANSPORTER

aruna (EXECUTIVE FINANCE) (24 Points)
Replied 03 November 2009

CAN ANYBODY PROVIDE ME THE DETAILS OF DEFINITION OF TRANSPORTER

THANKING YOU

ARUNA

C.A-IRCTC-EXECUTIVE FINANCE

Sorabh Gupta (Manager ( Taxation )) (877 Points)
Replied 03 November 2009

Aruna

As per income tax act there is no such specific definition of transporter ........But as i presume that you just asking due to change of provision of TDS. So can you telll us the exact issue so that we can reply in such manner.........

CA Rahul Jain (CA) (1162 Points)
Replied 03 November 2009

The Word 'Transporter' in case of TDS and Service Tax refers to the person providing services of plying, hiring or leasing goods carriages

NILESH SINDHWANI (C.A.) (22 Points)
Replied 20 November 2009

WHAT IS THE DEFINITION OF TRANSPORTERS AS INTENDED BY THE NEW AMMENDED 194C - I.E. - DOES IT INCLUDE THE TRANSPORT COMMISSION AGENTS ALSO WHO DONNOT OWN GOODS CARRIAGES BUT ONLY ACT AS MIDDLEMEN BETWEEN THE CONSIGNOR OR GOODS AND ACTUAL CARRIAGE OWNERS.. (eg: will an ABC Pvt. Ltd. be liable to deduct tds on frieght payments made to, say, Rahul Roadlines, who is a transport commission agent, who recieves the full frieght charges from ABC Pvt ltd and after deducting his commission pays the balance to the actual truck owner. in this example, we are assuming that Rahul Roalines has furnished the PAN to ABC Pvt. Ltd.)

Manoj Kumar (Dy. Manager (Taxation)) (23 Points)
Replied 04 May 2010

Dear Member

Can i knaoe what rate of T.D.S Should be deducted in the following situation in case of payment made to Transporter for goods Carriage.

1) If Pan Provide by Transporetr No .T.D.S Applicable.

2) If Pan not provided what rate should be be deducted normal rate of Higher Rate ei 20%

3) Whose Pan no is to be considered

TRANSPOTER OR AGENT TO WHOM PAYMENT MADE OF FREIGHT

MANOJ KUMAR

KATWARIA SARAI

NEW DELHI

Ramashankar Prasad (Accounts Consultant) (33 Points)
Replied 14 October 2010

Dear all

As section 194C Substituted by the Finance (No. 2) Act, 2009, w.e.f. 1-10-2009 which provided vide subsection 6 that tax shall not be deducted in case of plying,hiring or leasing of goods carriage if person who is paid for such services furnishes PAN to person paying sums. Read the exact wordings below

(6) No deduction shall be made from any sum credited or paid or likely to be credited or paid during the previous year to the account of a contractor during the course of business of plying, hiring or leasing goods carriages, on furnishing of his Permanent Account Number, to the person paying or crediting such sum.

Conclusion

Therefore, it becomes clear that only in case of Goods Carriage plying or leasing or hiring, Now my doubt is wheather TDS on hiring of bus by educational Institue is attract the TDS or not .

Pl provide the valuable suggession