TDS u/s 194c

[Guest]

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.

[CA Rachit Agarwal]

TDS will not be required to be deducted if the contractor furnished PAN pursuant to Section 194C. Tranportation of goods shall take places by the goods carriage as defined and that by ROAD.

Transport bills should be separately raised for the work done only for transportation of raw material.

Separate bills should be raised for the work carried out for other than transportation.

AI Summary

TDS on contractor payments may be unnecessary where transporter furnishes PAN and issues separate transport bills for goods carriage. Whether payments to a contractor engaged solely in transporting raw material by road are subject to withholding depends on classification and PAN compliance; if the contractor furnishes PAN and transport is effected by goods carriage, TDS need not be deducted, and transport services should be invoiced separately from non transport work.