TDS on Transporter

TDS / TCS 1588 views 4 replies

Vimal

Practising CA

25 Points Posted on 28 September 2009

Dear All

Section 194C cluase 6 of Income tax act altered by fiance Act 2009 as follows:

(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.

Now My query is

M/s X is partnership firm, who has a contract to transport of goods of ABC Ltd (Company). M/s X raise bill of trasnport to company, company paid it after deducting TDS. on other hand M/s X paid transport rent to small truck owners. M/s X again deduct TDS on payment to truck owners.

Now after giving effect of finance Act 2009 w.e.f. 01.10.2009 what should do? whether both M/s X and ABC Ltd exclude from liability to deduct TDS or only one? what should be formalities for PAN number collected from truck owners? whether register to be maintained? any return should required?

Please solvethe queies

Thanks

CA Vimal D Paun

Replies (4)

RAJAN GUPTA

SERVICE

653 Points Posted on 28 September 2009

In my opinion in both case TDS Liability is nil(after 1.10.2009)

Rajkamal

Manager

30 Points Posted on 29 September 2009

Hi Vimal,

Interesting query?

My understanding is that only M/s X has been absolevd from deducting TDS as he is making the payment to actual Truck owners and not the ABC Limited, provided the Truck owners provide with their PAN Numbrs.

ABC ltd is making payment to Agency whoc is in the business of earning agency commisssion by arrannging a platform between the Compnay and Transport owner.

But the issue is that the middlemen, M/s X would suffer as TDS would happen on the total amount and not only on his commission, which could cause a big hardship on these middleman's.