Tds on hiring heavy vehicles

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

08 May 2015 Respected Experts,
Kindly give your valuable advice:-
Two persons are running a partnership firm of "Supply of Tangible Goods Services" to the factories and the firm use to borrow the vehicle and machine on hire basis from different vehicle owner on monthly basis, and use to supply the same to the different factories and charges service tax under head "Supply of Tangible Goods Services", from the factories and deposit the same @ 12.36%.
My question is
1) should the firm deduct TDS while making payment to the actual owner of the Vehicle/Machine.
2) at what percent the TDS should be deducted and u/s which section.
3) Is it mandatory to take a TAN Number.
4) When it become mandatory to opt TAN.
5) The actual owner of the Vehicle/Machine are giving the vehicle/machine to the Partnership Firm, not to the factories, then under such circumstance what should be the legal boundation of the Actual owner, should they also charge the service tax to the PARTNERSHIP FIRM or not.
please do reply its urgent.
thanking you in advance.

Vishakha Kejriwal.

Vishakha Kejriwal. (Expert)
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09 May 2015 TDs u/s 194I @2% should be deducted for payments made to actual owner, and obtaining TAN No. by the firm is mandatory. Further prima-facie Vat should be charged by the owner under Vat Act as both possession and control seems to be transferred to the firm. For clarity of opinion, agreement with the owner needs to be perused.

Querist : Anonymous

Querist : Anonymous (Querist)

11 May 2015 RESPECTED VISHAKHA KEJIRIWAL JEE AS PER YOUR OPINION
1)THE TDS @ 2% U/S 194I (RENT) SHOULD BE DEDUCTED BY FIRM BUT IF THE FIRM MAKING PAYMENT TO ONE PARTICULAR ACTUAL OWNER OF THE VEHICLE MORE THAN 75000/- IN THAT PARTICULAR ACCOUNTING YEAR THAN IT IS MANDATORY OR ANY AMOUNT PAID WILL BE SUBJECT TO TDS.
1) CAN THE TDS WILL BE DEDUCTED U/S 194C(PAYMENT TO CONTRACTOR OR SUB CONTRACTOR).
2)AND AS FAR AS VAT ACT IS CONCERNED THE ACTUAL OWNER HAS TRANSFERRED THE CONTROL AND POSSESSION IN THE HAND OF THE PARTNERSHIP FIRM UNDER THAT INSTANCE WHAT SHOULD BE THE VAT RATE IN WEST BENGAL AND FURTHER TO CHARGE VAT THE ACTUAL OWNER NEED TO OBTAIN VAT NUMBER UNDER VAT ACT, PLEASE TELL ME WHAT WILL BE THE NATURE AND LIMITATION AND OBLIGATION UNDER VAT ACT FOR OBTAINING VAT NUMBER IN WEST BENGAL.
THANK YOU FOR YOUR PROMPT REPLY THANK YOU PLEASE REPLY AND SOLVE THE QUERY.

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Vishakha Kejriwal.

Vishakha Kejriwal. (Expert)
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11 May 2015 Prima-facie , Section 194I should apply, however, the finer aspects of the agreement between the firm and the owner would be required to come to a firm opinion whether Section 194C could apply.

Further, the owner would need to take a WBVAT regn. if its turnover of rental income crosses the threshold limit to charge VAT.

You could reach me at vishakhaagarwal13@yahoo.com for a comprehensive opinion if you wish.