Amit Bansal

Amit BansalIntroduction: Under the existing provisions of section 194C of the Act, payment to contractors is subject to Tax Deduction at Source (TDS) at the rate of 1% in case the payee is an individual or Hindu Undivided Family and at the rate of 2% in case of other payees, if such payment exceeds Rs. 30,000 per contract or aggregate of such payments of contracts in a financial year exceeds Rs. 75,000.

Current provision for transporter is non-deduction of tax from payments made to the contractor during the course of plying, hiring and leasing goods carriage if the contractor furnishes his PAN to the payer. Intention behind this provision was to exempt only small transport operators from the purview of TDS on furnishing of PAN, but it does not convey the desired intention and as a result all transporters (irrespective of size) are claiming exemption from TDS.

Now the provision of section 194C of the Act has been amended to expressly provide that the relaxation from no-deduction of tax shall only be applicable to the payment in the nature of transport charges made to a contractor who is engaged in the business of transport i.e. plying, hiring, or leasing goods carriage and a person who is not owing more than 10 goods carrige at any time during the previous year and who has furnished a declaration to this effect along with his PAN.

Intent of the amendment:

The Memorandum explaining the provisions of Finance (No.2) Bill 2009 indicates that the intention was to exempt only small transport operators (as defined in section 44AE of the Act) from the purview of TDS on furnishing of Permanent Account Number (PAN). Thus the intention was to reduce the compliance burden on the small transporter. However, the current language of sub-section (6) of section 194C of the Act does not convey the desired intention and as a result all transporters, irrespective of their size, are claiming exemption from TDS under the existing provision of sub-section (6) of section 194C of the Acton furnishing of PAN

Summary:

This means if a transporter is owing more than 10 goods carriage at any time during the previous year, then payer is liable to deduct TDS at the time of paying charges to goods transporter at the rate of 1% or 2% as the case may be, and

If transporter is not owing more than 10 goods carriage at any time during the previous year, then payer(Tax deductor) has to obtain a declaration from transporter along with his copy of PAN before execution of the contract or payment to transporter whichever is earlier.

This amendment is inserted with effect from the 1st day of June 2015.

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Category : Income Tax (26750)
Type : Articles (16239) Featured (4128)
Tags : pan number (267) Permanent Account Number (90) Section 194C (135) TDS (978)

58 responses to “TDS on payments made to transporters wef 01.06.2015”

  1. VENKATA RAJU says:

    Dear Sir,
    This query is regarding TDS deduction to transporter, if a transporter dose not give declaration as defined in section 44AE , regarding that he dose not own more than ten goods carriage at any time during the previous year.
    So, in this case how we have to deduct TDS .

    Thanking You,
    Regards.,
    P.V.Raju

  2. AJIT KUMAR says:

    Section 194C does not define about goods it is related with transport business. Accordingly TDS can be deducted as per law.

  3. CA SUDHIR GOYAL says:

    First of all you should ask declaration from all transporter having 10 or less trucks.

    If you are not liable to deduct TDS on any transaction then it is not mandatory to apply TAN and TDS return too.

  4. salim p kalu says:

    Dear Sir

    Please advice me on the following points

    i m in d business of export of agricultural produce i.e. onions and potatoes and doing d business at and from mumbai maharashtra.

    lot of different goods vehicles bring onions and potatoes from the different parts of state of maharashtra, gujarat and madhya pradesj and karnaka etc.

    shall i deduct tds on total transportation charges paid to them or shall i obtain only pan no and declaration from them for non deducting tds.

    is it that tds is not applicable for those who transport the vegetables and agricultural produce for export purposes.

    please suggest

  5. Manish Singh says:

    Dear Team,

    I am a supplier and hiring truck from transporter and maximum transporter/ owner is having less then 10 truck therfore as per provision of TDS, TDS will not applicable subject to declaration and copy of PAN.

    I am Individual assessee as per IT Act. and there is no other translation on which I need to deduct TDS.

    Now my doubt is I need to apply TAN and file TDS return as NIL or no need to file return and TAN.

    Please Help.

    Regards,
    Manish Singh

  6. srinivas rao says:

    Dear Tax team,

    Q1.
    If transporter is not crossed more than 30k per transaction and pan also not provided stightly deducted TDS 20%. or not ,please suggest.

    Q2.
    Some employee put it in reimbursement transporter bill, that bill amount is not crossed mone than 30k and pan number also not available on that transporter bill. in this case we will deduct tds. please suggest.

  7. Rajesh Thakur says:

    We pay Rs.18000/- PM Security Charges.First Four Month we not deducted TDS, but after crossing the limit Rs.75000/- we can to pay TDS on that first four month also ? can we pay interest on it. Please give suggestion Give example how to pay Tds in Month of November-15 with interest we are not paid TDS yet.

  8. mithilesh says:

    Sir,

    we are paying the payments to transports per bill rs. 500 to more than 10000 and monthly rs. 40000. so we are required the decleration form or not

  9. Lakshmi Kanta Maity says:

    we are paid as freight charges Rs. 5,000/-to transporter (same truck no.) weekly basis. or monthly paid Rs. 20,000/-. do I deducted any TDS? please reply me.

  10. M Ravinder says:

    TDS applicability if Transporter not providing the PAN. If deducted then how can make the return without mentioning transporters PAN No.

  11. Ganesan.p says:

    Sir,

    Let us know whether I have collected declaration form U/S 194c(6) from transporters for each and every bill or annually and i have uploaded the declaration form details in TDS return.

  12. SYED KALEEM ULLA says:

    What is the rate of TDS to be calculated on the truck freight where
    owner is having less than 10 trucks in the following cases:-
    i) If he does not produce copy of PAN card?
    ii) If he produces only copy of PAN card?
    iii) If he produces copy of PAN Card, Copy of RC & Declaration form?

  13. vijay says:

    hi sir,
    im transport agent, and do no t own trucks i take it from lorry market to serve my parties in rajasthan and gujrat. all trucks will get freight with parties or with me.
    pls explain my TDS system. what should i do?

  14. Basant says:

    We have made a contract with transporter. our transporter not having any vehicle. transporter made sub contract with other transporter and submit bill in his own name. total contract value is 10 crore.
    Whether TDS is appliable?

  15. Harsha says:

    I want to knows if the transporters having less than 10 vehicles. Then if he gives declaration in his company letter head along with pan card is this enough for the company for not deducting TDS or the transporter has to get the certificate from Income tax for non deducting TDS.

    Kindly clarify what to do regarding this.

  16. Lokesh Khattar says:

    Sir my question, as per new amendment on 1st June, 2015, “where such Contractor owns 10 or less goods carriages at any time during the previous year and furnishes a declaration to that effect along with PAN, to the person paying or crediting such sum, No deduction shall be made from the sum credited or paid”.

    Is same provision applicable on Transport union if they have more than 10 vehciles during the previous year and furnishes PAN and declaration to the person crediting such sum?

  17. Keshav tiwari says:

    Q:1- ek campany kisi lorry owner(lass than 10 goods carrier) ko paiment karega to tds katega ya hahi
    Q:2 – declation form ?notri se attesed karana jruri hai

  18. Vijayta says:

    What is toll charges are paid by the transporter? Are we required to deduct TDS on toll charges also.

  19. SUDIP MONDAL says:

    i want declaration format

  20. mohan says:

    i wannt declaration format

  21. mohan says:

    the bill is ganerated in may and the payment is mande in june i.e after 01.06.2015 whether tds will be deducted in case of transporter in case of owning more than 10 passenger goods.

  22. mohan says:

    if the bill is ganerated in may and the payment is mande in june i.e after 01.06.2015 whether tds will be deducted in case of transporter in case of owning more than 10 passenger goods.

  23. kamlesh pahuja says:

    Dear Sir,

    If the bill is generated in April & May month and the payment is made in June i.e after 01.06.2015 whether TDS will be deducted in case of transporter owning more than 10 passenger goods and 2nd thing

    If payment is made in may of some bills related to April month then also we have to deducted TDS by clubbing all the bill paid + unpaid in june.

    We pay service tax on transporter bill pls suggest us we charge Service tax on bill amount or on payable amount (amt after deducting TDS).

    Thanks

  24. umesh vijay asher says:

    thanks for information, i have one query.
    transporter has plied material in May’15. Invoice is booked in May’15 but we are paying invoice in June,15.(PAN available)
    shall we deduct 2% TDS while making payment in June ?
    please reply.
    regards,
    Umesh Vijay Asher
    Sr. Manager – F & A
    Deepak Fertilisers

  25. LAXMI says:

    IF TRANSPORT BILL IS RELATED TO LAST YEAR 2014-2015 & WE ARE MAKING PAYMENTS IN THIS YEAR THEN WHAT TO DO. TO DEDUCT TDS OR NOT.

    PLS HELP ME IT’S VERY URGENT

  26. arpit shah says:

    if the bill is ganerated in may and the payment is mande in june i.e after 01.06.2015 whether tds will be deducted in case of transporter in case of owning more than 10 passenger goods.

  27. arpit shah says:

    pls clarify that whwther tds will be deducted on bill which has been already paid on 25/05/2015 or not . Because the amnedment s effective from 1/06/2015.

  28. deepak tuli says:

    Dear All
    As per Amendment, “TDS shall not be deducted if the contractor owns ten or less goods carriages at any time during the previous year and furnishes a declaration to that effect along with”. Thus, if the transporter owns less than 11 goods carriages, even for a single day during the previous year, and furnishes declaration and PAN then TDS shall not be deducted.

  29. Ashish says:

    Hi

    Pl clarify this is applicable on payment made from 1st June on wards or from June months bills on wards.

  30. Santanu Roy says:

    Whether service tax will be included while deducting tds on goods
    transport agency…..

  31. ANKITA AGARWAL says:

    Dear Sir,

    I need a suggestion that on what amount TDS have to deduct? Below mention is an Example. Please provide answer for the same.

    For counting limit of Rs.75,000/- payment made to transporter in the month of April or May will be included or not? If yes, then on which amount Tds will be deducted? For example :- if Mr. A pays Rs. 45,000/- on 15-04-15 and 40,000/- on 20-06-15 to transporter. Then in this case on which amount Mr. A have to deduct TDS? on Rs. 40,000 or on Rs. 85,000/- as overall limit of Rs. 75,000/- exceeds.

  32. k k Sarawagi says:

    This is very difficult to trace out that Transporter will have more than 10 goods carriage at any time during the previous year for any payer. Practically it is cumbersome method. However, I am giving below a draft declaration which may be obtained from the transporter:

    TO WHOM SOEVER IT MAY CONCERN
    We, M/s …………………………………………(name and address) solemnly declare and affirm that we are engaged in the business of transport i.e. plying, hiring or leasing goods carriage and are eligible to compute income as per the provisions of section 44AE of the Income-tax Act. We further solemnly declare and affirm that we do not own more than 10 goods carriage at present and also confirm that we shall not own more than 10 goods carriage at any time during the current financial year 2015-16.
    We confirm that our Permanent Account No. is ………………………..(copy enclosed).
    For …………………..
    (Name and Designation)

    Place:
    Date:

  33. VINOD MALHORA says:

    THE TRANSPORTER SHOULD MENTION ALONGWITH PAN, HIS HOLDING OF VEHICLE IS LESS THAN 10 OR MORE THAN 10, WITHOUT MENTIONING THE NO OF VEHICLES HE OWNS.

  34. Omkar says:

    Sec 194 C states TDS applicable only if there is a Contractual relation ship between Specified person and resident contractor. I want to know whether TDS will be applicable to Transporter from 1.6.2015 with whom no Contract is exit but total billing amount is exceeding Rs. 75000, then whether we have to deduct TDS or fill details in 26 Q without Deducting TDS ?

  35. CA Daxesh Tandel says:

    Dear All

    as per the amended provision, the payer has to obtain a declaration from the transporter regarding no of vehicles he is own along with PAN.

  36. CA. Manoj Sharma says:

    Well This is very difficult to trace out that Transporter will have more than 10 goods carriage at any time during the previous year for any payer,

    Practically it is cumbersome method.

  37. shivanand says:

    Sir

    Please publish the declaration format(shivanand.tandsi@gmail.com)

  38. pankaj says:

    What if The transporter is a GTA (Goods Transport Agency) who hires goods carriage from various owners and lents them for hire? How will payments to such GTA for transportation be assessed in respect of the amendment?

  39. Anish C says:

    Pl. refer explaination (b) to Sec 44AE gien in Act, reproduced below

    (b) an assessee, who is in possession of a goods carriage, whether taken on hire purchase or on instalments and for which the whole or part of the amount payable is still due, shall be deemed to be the owner of such goods carriage.]

  40. WAZIR AND CO says:

    IF A PERSON GIVE HIS COMMERCIAL VEHICLE TO ANY DEPARTMENT ON HIRE CHHARGES FOR CARRYING HIS EMPLOYEES FROM ONE STATION TO THE OTHER IS HE TAXABLE

  41. PRAKASH says:

    If the contractor is owning 3 trucks, and fetching 10 trucks from market to do business, whether TDs needs to be deducted from payment made to him.

  42. RATAN KUMAR AGARWALA says:

    IF AN INDIVIDUAL IS ENGAGED IN TRANSPORT OF GOODS BY TAKING THIRD PARTY VEHICLES ON HIRE OR LEASE AND AS SUCH HE IS GETTING SUBSTANTIAL REVENUES IN CRORES AND AT THE SAME TIME NOT OWNING ANY VEHICLE OF HIS OWN, THAN IN MY OPINION HE CAN AVOID TDS IF HE FURNISHES HIS PAN AND DECLARATION TO THE CUSTOMER. THIS MAY BE A GOOD PLANNING TOOL FOR AVOIDING TDS. WE HAVE A PARTNERSHIP CLIENT WHOSE TRANSPORT REVENUE IS MORE THAN RS. 50 CRORES IN A YEAR BUT WHO DOES NOT OWN ANY TRUCK OF ITS OWN. THE FIRM TAKES THIRD PARTY VEHICLES ON HIRE AND ARRANGES IN SUCH A WAY THAT WHERE THE TRUCK OPERATOR IS HAVING MORE THAN 10 TRUCKS TO PUT THEM UNDER ANOTHER INDIVIUDAL SUB CONTRATOR EACH SUB CONTRACTOR HAVING ANNUAL TURNOVER OF LESS THAN 100 LAC. THIS MECHANISM MAY HELP AVOID TDS PROBLEMS.

  43. Kamlesh solanki says:

    Whats about transport agency ? who is providing transportation bill on his own name and the which value is much higher however they are earning only Rs. 50 to Rs. 60 per transportation bill, b coz he is not owning single truck, shall we have to take declaration ? or deduct TDS ? or provide him exemption ?

  44. Antim says:

    Bansalji,

    Thanks for your reply

  45. Moneypurse says:

    Very useful information. Thanks.

  46. naresh handa says:

    Hi,

    What need to be done when the transporter has increased the number of vehicles to more than 10 subsequently to his given the declaration during the previous year. Will the payee required to deduct TCS on payments already released without deducting the TDS.
    Regards
    Naresh

  47. Ankit Mittal says:

    In general, transport agents are working on commission basis who have made transport company & hire trucks for various parties by charging some builty charge and/or commission from both the truck owner and the person asking for the hire of the same. These transport agencies provide their builty on which freight etc is disclosed & have printed their PAN No. on the same. In case the transport owner is giving declaration that he does not own more than 10 trucks what should be done although he may be arranging truck of say 50-60 different truck owners?

  48. Abhilash says:

    This is an additional liability of department shifted to public to take declaration from transporter. what if he buys the 10 vehicle after one day of transaction & giving declaration ? what if he has taken on lease vehicles ? what if he has shown only 1 vehicle & operates with non tax payer many owners ?

  49. S Banerjee says:

    What is the meaning of ownership – Legal ownership or Beneficial ownership?

    If it is only legal ownership, then by taking the truck on operating lease and use it for transportation purpose could still avoid TDS.

  50. CA Amit Bansal says:

    Mr. C P Mishra,

    Sir,

    It is applicable to the payment in the nature of transport charges(whether paid by a person engaged in the business of transport or otherwise) made to a contractor who is engaged in the business of transport i.e. plying, hiring, or leasing goods carriage.

    Mr. Antim

    Sir,

    This amendment is part of Finance Bill 2015.It is Clause 43 of Finance Bill 2015.

  51. Anurag says:

    But are we required to get declaration from Individuals owners like the drivers who own there trucks..they are not so much educated that they can give the declarations..

  52. Aakash Garg says:

    Mr. Sahil, for this purpose the deductor will take a declaration from the transporter that whether he is owing more than 10 vehicles or or? And accordingly the deductor will deduct the TDS (if required).

    Thanks Mr. Amit Bansal for the updation.

  53. C P MISHRA says:

    THANKS FOR UPDATION, IS IT APPLICABLE ON GOODS TRANSPORT COMPANY OR ON TRUCK OPERATOR ?

  54. CA Amit Bansal says:

    Mr Sahil…

    Sir,

    Payer(Tax Deductor) has to obtain a declaration from transporter along with his copy of PAN before execution of the contract or payment to transporter whichever is earlier, so that he get to know that whether transporter is owing more than 10 goods carriage or not.

  55. Antim says:

    Sir,

    please share respective notification no. of Income Tax for above amendment.

  56. praveena rs says:

    Declaration form yet to release right??

  57. Sahil says:

    how a tax deductor will come to know that the transporter is owing more than 10 goods carriage at any time during the previous year???

  58. B.Chackrapani Warrier says:

    Read. Thanks for updation.

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