|Mr. X pays freight charges of Rs. 3,00,000 in a year to ABC Pvt. Ltd, whose business is only to arrange truck owned by different persons. The said companies does not own any truck but acts only as a commission agent. The buyer of goods pays freight charges to the said company and obtain its PAN.
Now, whether payer is liable to deduct tax u/s. 194C of the Act while mak-ing payment to the said company, not knowing who is the owner of the truck and whether such person owns more than 10 trucks? If not wheth-er any declaration from the Transport Agent needs to be obtained in terms of amended Sec. 194C w.e.f. June 01, 2015.
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|CA. H. N. Motiwalla
|Contractor, freight charges, tax deducted at source
From the query, it is clear that a payer, is seeking help from the company, for arrangement of trucks from others. The company does not own any truck therefore it is only entitle for commission. Hence, the payer is paying to the company not for carrying out any work.