22 January 2013
DEAR SIR my client is manufacturer of power saving devices they generally take up projects to identify areas to reduce energy consumption [free of cost]
subsequently they supply all the equipment's to user free of cost and recover the cost through the savings achieved over a period of time 3 years at the end of 3 years the material belongs to the buyer in this scenario my client raise a v a t bill on monthly basis
however since the memorandum of understanding is made before the supply of material some of their clients have deemed it to be contract & deducting TDS @2% on all their bills though my client does not mention about service tax or service bill anywhere in the bill
since their input is already there in the material procured to manufacture and supply it is deemed to be under v a t but their client is misguided & is continuously deducting TDS
how should this be stopped since this reflects on their 26AS form
And how will the service tax department treat this [will they accept it to be a mistake of the customer]
22 January 2013
The above case requires a thorough check of all the agreements and transactions ., this cannot be concluded in a single way., consult a good CA in this regard
CAclubindia
