02 March 2021
1)TDS under section 194C is not applicable on printing material as per customer specification, wherein customer has not supplied any material to contractor & contractor has supplied the final product for a price, which is in the nature of contract for sale.
2)In your case contractor purchases the material on his own and applies his labour on such material purchased& Further, the contractor is transferring the title in goods to customer and hence it is outside the purview of section 194C.
Reference : Circular No.13/2006 dated 13.12.2006
Before taking a decision on the applicability of TDS under section 194C on a contract, it would have to be examined whether the contract in question is a ‘contract for work’ or a ‘contract for sale’ and TDS shall be applicable only where it is a ‘contract for work’.
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