Tds applicabilty

This query is : Resolved

saurin (Querist)
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02 January 2012 Consider following example :

X ltd is a company who is purchasing materials from Y ltd.

In which Y ltd uses labour work (Contractor) of Z ltd and the amount paid to Z ltd is reimbursed by X ltd.

Query : Is X Ltd Liable For Deduction Of TDS?
and if what Y ltd has not deducted TDS ?

S.A.BADAMIKAR

S.A.BADAMIKAR (Expert)
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02 January 2012 As per my opinion,
1] X ltd (purchaser from Y ltd) had made payment to Z ltd, which is made "on behalf of" Y ltd, therefore it is not necessary to make TDS by X LTD.
2]As Y Ltd. utilised the Labour of Z ltd, the Y Ltd is liable to Deduct TDS for the Billing Done by Z ltd.

saurin

saurin (Querist)
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03 January 2012 But what if the bill of Z (Labour contractor) is raised in name of X ltd.?

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S.A.BADAMIKAR

S.A.BADAMIKAR (Expert)
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03 January 2012 If Z ltd raises bill to X ltd., then X-ltd is liable to deduct TDS.

saurin

saurin (Querist)
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03 January 2012 In the bill of Z Name written is Of X Ltd but is Paid By Y Ltd...then liability of tds will be of X Ltd....

Is This Correct..?