My vendor had raised a bill of Rs 2586311/- against interior fit out for developing a retail store. The bill had been charges in the following way.
Total- 23,00,088 67 % of the total amount- 15,41,059 Vat @ 13.5% on 67%- 2,08,043 33 % of the total amount- 7,59,029 Service Tax @ 10.3% on 33%- 78,180 Grand total- 25,86,311
There are two query on my in the above case. 1. Under which section the TDS will be applicable (194 C or 194 J) 2. The TDS will be deducted on which amount (On Labour job value or gross value).
Kindly give me the case law for the above answer, accordingly i will update my vendor.
28 September 2010
Interior decorator service comes under the category of professional services, hence 194J would be applicable. TDS should be made on gross amount i.e. Rs. 2586311
30 September 2010
It appears from the query, the vendor is taking abatement under notification 1/2006: which is not applicable for completeion and finishing services
Further interior decorator category is not allowed abatement of 67% as claimed in bill
Either the vendor should show a material sale and pay tax on balance (labour) OR bill under works contract under composition ( subject to conditions fulfilling works contract) OR pay tax @ 10.30%
CAclubindia
