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TDS on govt. appointed vendor

This query is : Resolved 

02 April 2009 The local municipal corporation has appointed a transport vendor to extract the sewage water from our office area on a fixed payment on trip basis.

As vendor is providing a service we want to deduct a tax, but the vendor's argument is that he is government appointed vendor and the fixed payment has to be received by them on whole basis without deducting any TDS or ESI.

Can we pay vendor without deducting the TDS as per his argument.

02 April 2009
When you are issuing the cheque to the vendor on the bill raised by vendor then you should deduct tds.

If the vendor is giving sufficient proof that he has paid esi then you need not deduct esi.



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