TDS on Freight.
As per new finance act it is mandatory to deduct TDS from the freight amount payable to Truckwala if he fails to submit declaration that he is not holding more than 10 trucks.. Here is few query in this regard.
1. Usually trucks are hired through transporter who act as a conduit between the truck owner and the person/company who wants to transport the goods.
2. The truck owner gets the freight from the consigner/consignee directly as per amount of freight mentioned on the freight bilty/chalan.
3. The recipient of the goods has to deduct TDS from the freight payable For the purpose of deducting tds whose PAN No. is to be taken into consideration (i) Truck Owner who is getting the freight (ii) Transporter who has issued the bilty . If a recipient is a company they insist on deducting TDS on the basis of transporter's PAN saying that they are paying to transport company where as in practice Transporter is merely a conduit who takes commision from the truck owner to put his truck for transportation of goods. Transport company doesnot make any accounting for freight and TDS is being deducted from their pan no.
My question is what should be legal procedure to comply with this provision.
One more query related to the above , If any third party pays freight on behalf of consignee for a consideration and gets the reimbursement from the consignee after certain days what tax obligations will be there for consignee and the third party who makes the payment.Awaiting foolproof compliance reply.
Regards
Himanshu Botadara more
1. Usually trucks are hired through transporter who act as a conduit between the truck owner and the person/company who wants to transport the goods.
2. The truck owner gets the freight from the consigner/consignee directly as per amount of freight mentioned on the freight bilty/chalan.
3. The recipient of the goods has to deduct TDS from the freight payable For the purpose of deducting tds whose PAN No. is to be taken into consideration (i) Truck Owner who is getting the freight (ii) Transporter who has issued the bilty . If a recipient is a company they insist on deducting TDS on the basis of transporter's PAN saying that they are paying to transport company where as in practice Transporter is merely a conduit who takes commision from the truck owner to put his truck for transportation of goods. Transport company doesnot make any accounting for freight and TDS is being deducted from their pan no.
My question is what should be legal procedure to comply with this provision.
One more query related to the above , If any third party pays freight on behalf of consignee for a consideration and gets the reimbursement from the consignee after certain days what tax obligations will be there for consignee and the third party who makes the payment.Awaiting foolproof compliance reply.
Regards
Himanshu Botadara more
Viewed by 353
Therefore, if transporter uses more than 10 trucks, he is subject to tds even though he may not be not an actual owner, more
Oct 21
What I am trying to say is only that man will be treated as transporter who has issued bilty irrespective of fact that actual owner of truck is different. In case he charges Only commission, bilty has to be issued by truck owner which is a ridiculous thought. more
Oct 21
Fully agree that tds on commission will be applicable as per section 194 h. The moot question is whether reimbursement of freight charges to the commission agent who is neither the truck owner nor the transporter/contractor (who pays freight amount to truck drivers on behalf of consignee and subsequently gets the reimbursement from the consignee) by the consignee is subject to TDS or not more
Oct 21
as per my view, if recent amendment in section 194C is seen in light of definition of owner as explained in explanation to section 44AE (also amended), deemed owner who are in possession of truck are also to be covered. Moreover, 194C is applicable on contractors and sub contractors also. so in my view if any contractor is in possession of 10 or more trucks by virtue of hire purchase or financial lease may be covered in ambit of section 194C. However, if such contractor is claiming that he is charging only commission on behalf of truck owner, we will have to consider applicability of section 194H for commission income also. more
Oct 21
