TDS APPLICABILITY

This query is : Resolved

A.S.SUNDARARAJAN

A.S.SUNDARARAJAN

(Querist)
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07 January 2020 The GST is charged at 18% for bus body construction under SAC code 9988 - Other manufacturing service in the material belonging to others.

There are two different stand is argued regarding applicability of TDS for bus body building charges. One is that as the term service is used , it will attract TDS.

Another one is that it is to be seen in the light of section 194 C of the income tax act. The term work as defined in section 194 C which does not include one if manufacturing activity is done with the material not belonging to customers. As bus body builders using their input for construction of bus body and transfer the property at the time of sales. Hence it is a contract of sales and not contract of work. In the income tax department circular also informed that if material is used by job workers other than customers, no TDS is to be deducted. The Income Tax tribunal, hydrabed has also given similar decision in 2000 in the appeal filed by APSRTC

We request expert opinion on the applicability TDS on bus body building charges ( single billing for material and labour).

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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07 January 2020 In the case of Slate of Gujarat v. Variety Body Builders Hon'ble Supreme Court has distinguished the facts of the case before them with the facts of a contract of bus body building implying thereby that in view of Hon'ble Supreme Court, a contract of bus body fitted into the chassis with all the materials supplied by the contractor and all the skill and labour contributed by the contractor constitutes a contract of sale.