TAX DEDUCTION AT SOURCE – ISSUE OF TDS CERTIFICATE UNDER SECTION 203 OF THE INCOME-TAX ACT – CASES OF TRUCK/GOODS-CARRIAGE OPERATORS – REGARDING
CIRCULAR NO. 6/2006, DATED 23-6-2006
As per the provisions of section 203 of the Income-tax Act, read with rule 31 of Income-tax Rules, every person deducting tax in accordance with the provisions of the Act shall, within a period of one month from the end of the month during which the tax was deducted, furnish to the person from whose income/payment the tax has been deducted, a certificate to the effect that tax has been deducted, specifying the amount so deducted, the rate at which the tax has been deducted and such other particulars as have been prescribed.
However, representations have been received that in the case of the road-transporters, where tax is deducted under section 194C from the payment being made to the truck-operator on delivery of the goods by the consignee, the certificate is either not being issued by the consignee within the prescribed time or the certificate is being issued in favour of the consignor of the goods at the place of the truck-operator. As a result of such irregularities, the truck-operator is not able to claim credit for the tax deducted from the payments received by him.
In consideration of the above and the trade-practice prevailing in the road-transport industry, where the truck or such other goods carriages is booked by the consignor but the payment is made by the consignee on delivery of the goods, the Board hereby reiterates the provisions of section 203, as mentioned above, and advises the consignee to issue TDS certificate in the cases of the truck/goods-carriage operators within the prescribed time and in favour of such truck/goods-carriage operators.