As we all that, before Finance Act, 2015, 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 or aggregate of such payment in a financial year exceeds Rs. 1,00,000. Prior to 1.10.2009, section 194C of the Act provided for exemption from TDS to an individual transporter who did not own more than two goods carriage at any time during the previous year. Subsequently, Finance (No.2) Act, 2009 substituted section 194C of the Act with effect from 1.10.2009, which inter alia provided for 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 Permanent Account Number (PAN) to the payer.
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 transporters. However, the 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 provisions of sub-section (6) of section 194C of the Act on furnishing of PAN.
Therefore to achieve the desired intention, Finance Act, 2015 make an amendment in the provisions of section 194C of the Act to expressly provide that the relaxation under sub-section (6) of section 194C of the Act from non-deduction of tax shall only be 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 an contractor who is engaged in the business of transport i.e. plying, hiring or leasing goods carriage and who is eligible to compute income as per the provisions of section 44AE of the Act (i.e a person who is not owning more than 10 goods carriage at any time during the previous year) and who has also furnished a declaration to this effect along with his PAN. This amendment is effective from 1st June, 2015.
Extract of Section 194C(6) are as under:
194C – Payments to contractors.
194C(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, where such contractor owns ten or less goods carriages at any time during the previous year and furnishes a declaration to that effect along with his Permanent Account Number, to the person paying or crediting such sum.
(Compiled by Taxguru Team)
Republished with Amendments
We are a manufacturer and hire small tempo for delivery the material, and tempo having no PAN No. so we can deduct TDS on there payments and what rate? But annual payments less than Rs. 75000.00 and only having single tempo.
We are a manufacturer and hire small tempo for delivery the material, and tempo having no PAN No. so we can deduct TDS on there payments and what rate. but annual payments less than Rs. 75000.00
SIR WHAT ABOUT OCEAN FRIGHT AND RAIL FREIGHT ????
Dear all,
Could you please explain more about tds on GTA. I would like to know more about 10 goods carriage. As per notification of finance bill 15-16 small transporter not furnishing pan no need to deduct the td
Sir, please say shall we shall deduct tds from agent or truck owner as we are in hiring business only. We have no trucks we hire place them to pvt ltd company. We hire these trucks from agents or sometime directly from owner. Please say our for TDS. We are transporter.
If, i am as company, i have to paid dailly freight charges to transporter, what rate will i have to deduct the TDS on that freight Inward, Please sent me that slab of tds rate and the concept of truck owned less that 10 and more, for tds applicability,
Sir,
pls clarify me, to day we have hired one truck and paid advance of Rs.40000/- for transport our materials from one place to another place. Now TDS will applicable or not on said transaction???. if the single owner gave declaration will he exemption for TDS??
HLLO
we have engaged with transport business but we have not own trucks. we take truck from truck owners. in this condition can we give declaration for non deduction of TDS.
Regards
Ketan PAtel
SIR,
what is the meaning of “own”.
example: transporter having 12 trucks 4 own & 8 on lease (whether operating or finance lease). Is this transporter also subjected to TDS under said section?
– See more at: https://taxguru.in/income-tax/tds-deductible-payment-transporters-owing-10-goods-carriage.html#sthash.KBusY2Hk.dpuf
According to 194C if the single payment exceeds Rs.30000 or for the financial year the amount exceeds Rs.75000 the TDS is to be deducted at applicable rate, is this provision applicable to small Transport contractor(owned less than 10 vehicles), even if payment of amount exceeds the above said limit?
Would it require to upload Declaration received from Transporter on TDS traces while e-filling Nil TDS return..?
SIR,
what is the meaning of “own”.
example: transporter having 12 trucks 4 own & 8 on lease (whether operating or finance lease). Is this transporter also subjected to TDS under said section?
Dear Sir,
If a Private Ltd company has less than ten trucks, but also engage other trucks from market for transportation of the goods of his client. Company gives declaration that he do not own more than 10 truck and also gives copy of company’s PAN card. Will the company liable for TDS deduction or not. Please clerify the matter.
Lalit Shah
4.06.15
Sir I am working in a manufacturing co. In co. One truck coming many times in a year.what is the liability of my co.
Is it necessary to collect declaration from all truck owners. If Consignment note is different?
Dear Sir,
Pls inform me that first bill of transporter 30000/-, and total amount 75000/- in financial year than that time we able to Deduct TDS on Bill ?????????????
pls reply fast.
I am a transpoter contactar I how to ducted tds on truck driver and owner plz give me advice me
Dear Ad
Yes, it is mandatory require to furnish such details by the transporter and if not provided by transporter then, deduct TDS as applicable rate @1%/2% as the case may be .
sir what is the meaning of “own”.
Dear Sir,
We have textile trading business. Transporters deliver goods to our godown. Shall we receive declaration from transporters? Are we eligible to deduct TDS u/s 194C(6) of Income Tax Act?
Dear sir,
My clearing agent issued us Custom expenses like Container Loading,damrage,documantation,rail freight concor,DEPB licence verification charges and saprate bill issued agency charges,Can I deducted TDS and one Bill raise of container moving freight charges.but My agent is issued his prop firm bill and he is hire truck so please inform to me can I deduted tds from his bill.
Sir,
we are awaiting for your reply.
Dear Sir,
1. We are transport contractors
2. We outsource trucks from agents
3. Is it necessary to collect declaration from all truck owners.
4. Since we out source trucks from the agents, and we really do not own any goods carriage, and outsource trucks cross 10 nos, can we submit the declaration to our customer who pay our transportation freight
Dear Sir,
I want to know that for claiming exemption from TDS is it necessary that vehicles have to be less than 10 and Income have to be computed u/s 44AE. Is it necessary to fulfil both the conditions?
My Qwerry is
When Transporter working on commission basis and hiring truck from outside on commission basis.How you will take this.
Dear Sir,
Plese clarify the followings:
01. Rs.30000/- / Rs.75000.00 is bill amount or TDS amount. ?
02. I have seen some messge that TDS @ 1% / 2%. Please explain if such difference is there.
Thanks
Sreekanta
we need to take declaration in which manner whether a prescribed format is their like 15G/H or a simple declaration which is not required to be submitted in Department.
Dear Sir
We are a transporter but we don’t have any vehicle pls confirm we can issue declaration less than 10 vehicle and our client will be deduct TDS under 194C
TDS will not be deducted if Transporter is having less than 10 Trucks. But what if Transporter place the trucks which are hired by him – in that case TDS will be deducted or not. How the use will know, whether truck is owned / hired by the Transport Company.
Sir Pls. advice whether one time declaration for not having more then 10 trucks is ok or declaration on each bill is required to substantiate the correctness of declaration at the time of payment to party.
Dear Sir/Mam
please suggest me on which amount TDS deduct if i paid a part amount (only to pay/advance) of transportation charges. Transportation payment detail in TDS return compulsory or not (if PAN given by Transporter for no deduction)
What is the declaration format for transporter who comes under 44AE
Pls. elobrate the tds on transportation of goods by Road.
Is there any specified format for such declaration if assessee owns less than 10 trucks ?
What does the word “ELIGIBLE FOR 44AE” means??
Does it means that if a transporter is eligible for 44AE but is not opting 44AE than also no TDS required to be deducted if he furnishes his PAN and declaration
Dear All,
As mentioned, that, it will be effective from 1st June 2015 i.e. payment to be made on or after 1st June 2015.
Do we need to check no. fleets held by the transporter during 2014-2015 or during current year i.e. 2015-2016 ??
If suppose he is not having more than 10 fleets during 2014-2015 and acquires during 2015-2016 after 1st June 2015, and thereby making his fleets more than 10, then, do we need do deduct TDS retrospectively or prospectively ??
Do we need to deduct taxes on bills booked during the month of April & May 2015 and payment of which to be made on or after 1st June 2015 ??
Your quick reply will be appreciated.
Regards,
Nishit Saiya
Dear sir,
if assesee is dealing with transporter union to hire truck and a union is not having a single truck in the name of it.
tell me than if 194C is applicable or not.
SIR, WHETHER WE HAVE TO DEDUCT TDS ON BILLS OF APRIL AND MAY OR WHETHER SUCH BILLS ARE OUTSIDE THE PURVIEW OF TDS COMPLIANCE ?
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?
what is the meaning of previous yr can anybody explain with example.
Sir,
please clarify whether we have to check actual ownership of vehicle for calculation of number of goods carriages or if transporter is acting as an facilitator only wherein he does not own any vehicle but engages number of vehicle for supply of material.
Mr. chandan
Tds will be deducted if following condition satisfy
1. Transporter owns more than 10good carriage, AND
2.payment exceed 30000 one time /75000 aggregate in a year.
(if 2 condition satisfy u must deduct tds irrespective of declartion]
OR
3. if he owns 10 or Less good carriage Donot furnish Declartion payment exceed limits.
In your case since he owns more than 10 G.C payment exceed 70000
Your company shall liablie to deduct tds.
Note: If you know the transporter actualy owns more than 10G.C. and furnish you false declaration that he owns less than 10. -then you shall follow such declartion
@puttartaju s.
So what ,if anyone have more then 10 goods carriage, he shall hv sufficient means to comply with income tax act provision.
Tds is just a deduction, he may get refund later on
@dear ad
Person owns more than 10 goods carriage is not small transporter in the view of Income tax act.
Deduction of tds is duty of service reciver not the transporter. Transporter will furnish above detail only if the service recevier ask.
Sir,
My question is if transporter owning more than ten goods carriage and he will also provide me declaration form with director signature than
1. TDS liablility leavy on company ? and
2. If his overall yearly payment more than 75000 so company liable for tds deduction.
Pls your answer send to my mail id “chandan200892@gmail.com”
This is a ridiculous amendment.In this age of inflation, increased fuel prices, hard to be found drivers and coolies, neck to neck competition I am sure most of the transporters may even break even.
In my opinion and experiences, very few goods carriage entities make profits. Now this adhoc TDS provision will add to the worries of the transporters.
In case the transporter does not furnish declaration as to how many goods carriages he owns; it will be assumed that he owns 10 or more such carriages and TDS shall be deducted.
Furnishing PAN is compulsory otherwise TDS rate shall be 20%.
The objective of this amendment is to link it with sec 44AE. According to sec 44AE if the assessee is owner of more than 10 goods carriage or who is doing business with hired goods carriage (CBDT Circular 684 Dated 10/6/94) it will not be covered under this section.
As per the proposed amendment if the assessee is not covered u/s 44AE, TDS will be required to be deducted.
If he/she has 10 good carriage , Than he will not come under the small transporter .Than he will come under the TDS compliance .
Sir my question is if suppose a small transporter owns more than 10 goods carriage during a year and he does not furnish these details to the concerned deductor that he owns more than 10 goods carriage and so no TDS will be deducted on the income of small transporter & is it compulsory to furnish such details by the transporter ???
Sir my question is if suppose a small transporter owns more than 10 goods carriage during a year and he does not furnish these details to the concerned deductor that he owns more than 10 goods carriage and so no TDS will be deducted on the income of small transporter & is it compulsory to furnish such details by the transporter ???
Read more at: https://taxguru.in/income-tax/tds-deductible-payment-transporters-owing-10-goods-carriage.html?replytocom=60865#respond
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