13 April 2013
Facts of the Case: My client is getting pamphlets printed from a Brand Marketing Agency. They are invoicing their bills as "Printing Charges" and supplying the pamphlets and broachers as per client's specifications and requirement. However, my client is not providing any materiel to the agency.
Now the agency says that please deduct TDS u/s 194C on the payments made as every customer of theirs deduct tax on the payments made to them.
I am confused wrt the issue since some queries posted on this website suggest that such activity is covered u/c 194C citing Circular 715/1995 but as per my research, as per Circular No. 13/2006, dated 13-12-2006 of CBDT it is clearly mentioned that any 'contract of sale' is distinctly different from 'contract for work' as per the principles laid down in para 7(vi) of Circular No. 681, dated 8-3-1994 even though in reply to question No. 15 in Circular No. 715, dated 8-8-1995 expressed contradictory views.
Question: Whether my contention is correct that the particular case is not covered u/s 194C ?
13 April 2013
The circulars referred are infructous in view of the substitution of the section with effect from October 1, 2009. Therefore, the activity referred doesn't come under the term 'work' and hence income tax need not be deducted under section 194C.
02 June 2013
Since the printing is done by execution of contract. You have given the quotation and after negotiation it has been finalised which amounts to contract and therefore the provisions of Section 194C is applicable and hence TDS is to be deducted
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