Whether payment made to transporters is exempt u/s 194C, if PAN is furnished

[DEV KUMAR KOTHARI]

194C- exemption on furnishing of PAN is only to payment made to contractor in course of specified business and not in all cases. It seems that there is large scale confusion by which it is considered that any payment made to transporters is exempt if PAN is furnished. This is not so clear, it appears that exemption is only for persons engaged in business of plying, hiring or leasing goods carriages The relevant portions of Section 194C reads as follows: (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, on furnishing of his Permanent Account Number, to the person paying or crediting such sum. For any general business person (other than those engaged in specified business of plying....) ,in view of controversy, it is advisable to deduct tax from payments made to GTA / transporters and deposit it. Tax deductible upto February must be deposited before March, otherwise the relevant sum shall be disallowed in PYE 31.03.xxx and allowed only in the year in which TDS is deposited. For Tax deductible and actually deducted during March the due date may be 7th April/ 31 May, however the relevant sum can be allowed even if TDS is deposited before due date to afile return of income u/s 139.1 On reading of memorandum exp[laining amendment also it appears that exemption is available to vehicle operator who move from one place to other and find dificult to get TDS certificate. Therefore, itis advisable to deduct tax where applicable from payments made to GTA and other transporters when payment is not in course of business of plying, hiring , leasing of GCV. Readers views are welcome.

AI Summary

TDS exemption on transporter payments limited to contractors in plying/hiring goods carriages when PAN furnished; otherwise deduct TDS.
Exemption from TDS on payment to transporters when PAN is furnished is confined to contractors receiving payments during the course of business of plying, hiring or leasing goods carriages; it does not automatically apply to all payments to transporters. Ancillary charges included in a composite GTA service are treated as part of the principal transportation service and may fall within the exemption if the transporter is engaged in the specified business and furnishes PAN; otherwise payers should deduct and timely deposit TDS to avoid disallowance of expenses.