Canteen contract

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

07 February 2016 Dear experts, we have taken canteen contract from A pvt. company in which we will prepare t'he food & sell to the company's workers however the 20% contribution we will have to give the company as per the turm of contract. query..1) should we charge ST from company workers..2) weather we will have to pay ST to company 20% contribution thereon..2) should we made tds on 20% payment made to company.. Regard Gaurav Jain

Ganeshbabu K

Ganeshbabu K (Expert)
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07 February 2016 1)No Service tax applicable by virtue of Sr.19A in ,vide Notification No. 14/2013-ST,
dated 22 October 2013

2)In my opinion you need to pay servicetax if they claimed it in their invoice as receipt is in the nature of commision.

3)Yes TDS applicable u/s 194H

Querist : Anonymous

Querist : Anonymous (Querist)

07 February 2016 sir.. on point. No. 2) i am confused weather it is Nature of commission or not actually the term of contract was we will prepare the food & sell the same to company workers.. and the materials of food will be provide by us. the company has provide only space in its premises and its workers to buy foods.. for that we will have give 20% contribution..assume in one monthe if we sold the foods Rs. 1 lacs then we will have to give 20000 to company.. so plzz tell me in which nature this 20000 can be treat weather in commission, rent, incentive or anything else...

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KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)
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07 February 2016 It depends terms of contract, as per your explanation you are giving contribution on turnover, so it is not rent it should be commission,
Tds should be deducted @10% on commission if it exceeds Rs.5000/-

Ganeshbabu K

Ganeshbabu K (Expert)
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08 February 2016 TDS applicable under section 194H,it is fixed percentage on turnover you made in factory,..you cant make it under rent or 194C