TDS on Transportation Cost

[Guest]

A sales invoice was raised and transportation cost was loaded in the bill. The buyer has deducted TDS on this transportation cost portion u/s. 194C @2%. Is it right ??? Please advice

[Ram Babu]

I think it is not right as transporter providing his services to you not the buyer. if the transporters bill paid by you then you only liable to deduct the TDS not the buyer. Moreover there is no need of deduct the TDS on transporter if transporter provides their PAN number.

[Snehal Kulkarni]

If I am not wrong there is one declaration which also needs to provide along with the PAN No, then only the exemption from TDS will be applicable.

Please check.

AI Summary

TDS on transportation cost: payer liable only when paying transporter unless transporter furnishes PAN and declaration. Whether TDS is correctly deducted on transportation charges included in a sales invoice: liability to deduct falls on the person who pays the transporter, so a buyer should not deduct if the seller pays the transporter; deduction is not required where the transporter furnishes PAN, and an additional declaration may also be necessary for exemption.