Amit Kumar (accountant) (57 Points)
07 December 2009dear all,
i have been working with a logistics company. we take the services of train operators to carry the goods of customers. can u pls tell me whether the amount paid to train operators is liable to tds. kindly mention the reason for your answer.
Kamal Jain
(FCA)
(200 Points)
Replied 07 December 2009
Are they private operators or Indian Railways? If private then TDS is applicable.Indian railways not subject to TDS.
Shudhanshu Agrawal
(Business)
(2570 Points)
Replied 07 December 2009
As Indian railways is undertaking of Central Government so there is no benefit in deducting the TDS on the payment made to Indian Railways as per Section 196 of Income Tax Act, 1961.
Amit Kumar
(accountant)
(57 Points)
Replied 07 December 2009
ok ..if they are liable to tds under which section they are liable as they are private operators and u/s 194 c it is written that transport by rail does not come within definition of work.
Sunil
(Trader)
(2611 Points)
Replied 07 December 2009
Definition of work in section 194C
Work includes
carriage of goods or passengers by any mode of transport other than by railways.
The person whom you are paying to has taken on lease the high capacity parcel van from the railways on a selected mail / express train or he has leased some wagons of specific freight trains and he is carrying your parcels by railway. The section 194C in this case has excluded carriage of goods by rail from definition of work. Therefore you are not to deduct any TDS from the train operator.
The train operator is similar to a toll plaza operator or parking lot contractors who suffer TCS at the hands of the one leasing the toll plaza or parking lot. The railway is collecting from him TCS for giving the high capacity parcel vans in M/Exp Trains or renting out to him certain wagons in some of the freight trains for which he can offer his service of CARRIAGE OF GOODS BY RAIL. It is not mentioned specifically carriage of goods by Indian Railways.However, only carriage of goods by rail should be in the contract.
What happens is similar to a car park contractor on railway property. Railway has collected a lumpsum annual fee from the successful bidder and the bidder has to pay this with TCS. He is then given the right to collect parking charges from cars. Same is the case with these wagons or high capacity parcel vans. Railway has compromised a lump sum carriage charge for the wagon for the full year on the certain m/exp/freight train and the operator is given the freedom to carry upto marked weight / cubic capacity and charge the customers making small bookings. His contract with user is carriage by railways.
However, if you have made a composite contract for multi modal transport that would also include movement by means other than rail, you would have to deduct TDS on the whole contract.
NARENDER PAWAR
(CA final Student)
(337 Points)
Replied 08 December 2009
their is no tds on freight & cartage u/s 194c from 1st oct. 2009
so tds is not a[[licable
Ajay Kumar Rai
(Chartered Accountants)
(89 Points)
Replied 08 December 2009
work as defined u/s 194C
a
b
c carrige of goods or passenger by any mode of Transport other than by railway
here it is clearely defined that " other than Railway"
so we cannot deduct TDS
Amit Kumar
(accountant)
(57 Points)
Replied 08 December 2009
too many answers!!!!!!! can anyone tell me the final thing to do...whether TDS is to be deducted or not??
b.srinivasan
(Assistant Company Secretary)
(51 Points)
Replied 08 December 2009
Hi,
TDS need not be deducted on transport of cargo from 1st Oct.2009, if,
1. The goods are carried by road.
2.The transporter provides his PAN
3.Both are combined condition . Othewise deduct tax.
Shudhanshu Agrawal
(Business)
(2570 Points)
Replied 08 December 2009
I dont know in which part of India Train transport is privatised. Please mention the areas. Moreover as per Section 196
Sunil
(Trader)
(2611 Points)
Replied 08 December 2009
Train transportation is not privatised per se. However, these days railway is leasing out wagons in some specified freight trains and also the High Capacity Parcel vans in select mail / express trains to private parties for a lump sum annual consideration. This is done by bids. The successful bidder is responsible for canvassing of cargo and filling these wagons / high capacity parcel vans. It is called the Blue Service. The sucessful contractor is carrying goods by rail. The privatised portion is only the van leased out annualy.
In the subsitituted Section 194C, work includes
(c) carriage of goods or passengers by any mode of transport other than by railways
Therefore there is no TDS on the above even if you pay to the private train operator.
The following although falling in the definition of work are specifically excluded:-
(6) No deduction shall be made from any sum credited or paid or likely to be credited or paid during the previous year to the account of a contractor during the course of business of plying, hiring or leasing goods carriages, on furnishing of his Permanent Account Number, to the person paying or crediting such sum.
Therefore , in addition to carriage by rail, whatever cargo is carried in any means that qualifies to be goods carriages as defined in Explanation to sub-section (7) of section 44AE is also specifically excluded for application of TDS provided PAN is furnished.
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