TDS

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Yajuvendra Rawat (Querist)
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30 November 2009 Dear Friends,

While auditing i have come across a bill which includes Sales + Labour. Actually the bill includes repairing charges of a vehicle in our company. For repairing parts were required & the same were purchased for Rs. 25,000/- + Vat extra. Now the same bill includes Labour + service tax. The service tax is however applied on the labour only.My question is whether i am supposed to deducted T.D.S. on the whole bill or only Labour charges + Service Tax. I guess we can call this bill as(Sales incidental to Labour) & hence no tax should be deducted, but still i am not sure.Please answer my query & also give logical view on the answer suggested.

CA.SHAHZAD SAYYED

CA.SHAHZAD SAYYED (Expert)
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30 November 2009 Dear Rawat
TDS is not required on sale of Goods, similarly the service tax portion is not a payment to labour but it is charged on behalf of Government & hence payable to Government
Now only Labour Payment remains on which you should deduct TDS u/s 194C

Dayal

Dayal (Expert)
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01 December 2009 please clarify who has purchased the spare the company or the agency doing the repairs

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Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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01 December 2009 The question is whether income tax is to be deducted u/s 194C on the bill. If so on which amount. Now section 194C has amended w.e.f 01/10/2009 by which if the material is not supplied by the company (ie purchased from market), the said activity will not come under the definition of 'work' and no income tax is to be deducted at source.
On the other hand if the bill is relating to pre amended period income tax has to be deducted on the labuor component plus service tax.