Previously, payment to transporters carrying on the business of plying, hiring, or, leasing of goods carriages is not liable to withholding tax if the transporter furnishes her/his permanent account number to the payer. It seems that the intention of having this provision was to exclude small transporters from the rigours of TDS provisions. But because of the way the section was drafted, all transporters were excluded from the TDS provisions if they had a PAN.
With a view to bring back the big transporters back into the TDS fold, from 1st June 2015 onwards, this exemption will be available only to those transporters who own ten or less goods carriages at any time during the previous year. Such a transporter would also need to furnish a declaration to that effect to the payer along with the PAN.
There was also some bit of confusion in the minds of a few people as to whether the said section (and exclusion) applied to payers engaged in the business of transport or to payees engaged in the business of transport. To remove this confusion, it has now been clarified in the Memorandum to the Finance Bill that this exemption is available whether such amount is paid by a person engaged in the business of transport or otherwise.
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