Income Tax – TDS – Truck operators
As per section 203 of the Income-tax Act, every person deducting tax is required to furnish to the person from whom tax is deducted, a TDS certificate to the effect that tax has been deducted, specifying the amount so deducted, the rate at which the tax has been deducted and such other particulars as have been prescribed.
This has created some problems for the truck operators whose jurisdiction is as wide as that of the CBDT. Where tax is deducted under section 194C from the payment being made to the truck-operator on delivery of the goods by the consignee, the certificate is either not being issued by the consignee within the prescribed time or the certificate is being issued in favour of the consignor of the goods at the place of the truck-operator. Because of such irregularities, the truck-operator is not able to claim credit for the tax deducted from the payments received by him.
The trade practice is that the trucks are normally booked by the consignor, but payment is made by the consignee and in this scenario, the Board has reiterated the provisions of section 203 and advises the consignee to issue TDS certificate in the cases of the truck/goods-carriage operators within the prescribed time and in favour of such truck/goods-carriage operators.
Board has also cautioned that that in case of any failure in timely issue of certificate or in case of issue of certificate in favour of any person other than the person from whose payment tax has been deducted at source, the provisions of section 272A(2)(g) shall be attracted, under which, penalty of one hundred rupees for every day during which the failure continues is leviable.
But there is another side to the story. Many of the truck operators do not want the TDS certificates or refuse to take them. There are many truck owners who refuse to ply if TDS is deducted. Even if it is deducted, they will not claim it for the simple reason that they will not be paying any income tax. All this will go when the centralized computer generated TDS certificates will be issued by the Assessing officer.
CBDT CIRCULAR NO. 6/2006, Dated: June 23, 2006