tds on payment to transpoters

This query is : Resolved

rahul (Querist)
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31 August 2007 if a co. paid freight to transporters on behalf of another co. then the co who made payment to transporter is liable to deduct tds.

Shyam Lal Naik

Shyam Lal Naik (Expert)
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31 August 2007 The company on whose behalf payment is made is liable to deduct tds.

CA Mani

CA Mani (Expert)
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01 September 2007 On behalf of whomsoever freight is paid,

Payee is liable to deduct TDS.

i.e. Paying company.

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Shyam Lal Naik

Shyam Lal Naik (Expert)
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06 September 2007 Sir,

The paying company(Say A) is not paying for carrying out any work, only the paying company is making payment on behalf of other.

As far as the company on whose behalf payment is made(Say B), the payment will be treated as constructive payment.

B is liable to deduct TDS and deposit the same to the Government a/c, issue TDS certificate etc.

Moreover, B will credit the account of the payee for the freight charges and TDS is to be deducted, once the account is credited.