TDS on Contract u/s 194C

[ASHOK VIJAY]

We have availing crane services in our factory for loading and unloading of material. please advice whether TDS to be deducted or not. Whether it is fall under Transporter service contract category

[NANDKUMAR SAGWEKAR]

Indeed you have to deduct the TDS as TDS on contractors u/s 194 c the nature of service mentioned by you does not fall under Transporter service. You have deduct the TDS @ 1% or 2 % as per the constitution of the contractor. ANAND SHEMBEKAR CELL NO 9209904370

[CAGOPALJI AGRAWAL]

I endorse the view of Ashok Vijay. But we will have to see the nature of agreement for cranes. If cranes are hired with all risks and rewards, then the contract may also fall under section 194I.

AI Summary

TDS on contractor payments: deduct under contractor withholding for crane services unless hire transfers risks and rewards. Payments for crane services used for loading and unloading attract TDS on contractors rather than transporter-service treatment; withholding must be made under the contractor TDS rules at the rate determined by the contractor's constitution. If the crane hiring agreement transfers substantially all risks and rewards to the hirer, the transaction may be reclassified as a hire/lease character requiring a different withholding approach, so the contract terms should be examined to determine proper classification.