TDS u/s 194c

[CHITRA RAGURAM]

A contractor is undertaking an work of transporting the raw material to the factory. They are paid based on MT handled. They are not involved in loading and unloading operation. Please clarify, if they have to be treated as transporters and no TDS to be deducted.

AI Summary

Contractors transporting raw materials exempt from TDS under Section 194C if PAN is provided; separate transport bills needed. A contractor is transporting raw materials to a factory and is paid based on the metric tons handled, without involvement in loading and unloading. The query seeks clarification on whether the contractor should be treated as a transporter, exempting them from Tax Deducted at Source (TDS) under Section 194C. The response clarifies that TDS is not required if the contractor provides a PAN. Transportation bills should be issued separately for transporting raw materials, distinct from other services.