TDS u/s 194C on payment to transporter

Huge amount of payment is made regularly by business to transporters. Due to huge payment there are chances of mistakes. Non deduction of TDS u/s 194C on payment to transporter attracts 30% dis allowance of the expense and attracts other penalties and interest.Earlier there was provision that where transporter owned less than two goods carriage TDS was not deductible,after that TDS was not applicable if PAN is provided by the person carrying business of goods carriage. New provisions are enacted to exempt small taxpayers transporter from TDS compliance.

TDS u/s 194C on payment to transporter
TDS u/s 194C on payment to transporter
TDS u/s 194C on payment to transporter
 
Currently applicability of TDS u/s 194C on payment to transporter is as follows:
  • If transporter who is contractor engaged in the business of the hiring,plying or leasing goods furnishes declaration that he owns less than 10 goods carriage at any time during previous year TDS u/s 194C on payment to transporter not applicable whether by transporter or any business.If transporter who is contractor engaged in the business of the hiring,plying or leasing goods furnishes declaration that he own more than 10 goods carriage at any time during previous TDS is applicable at 2% on other than individual and at 1% on individual if person furnishes PAN on payment made whether by transporter or any business.
Below is citation of the act:
 
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”
 
Owner of this information can be reached at K M GATECHA & CO LLP.

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