Tds on materials

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Jitendra Giri (Querist)
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24 March 2014 Is tds deduction applicable under contractor / sub contractor(194 C) on materials,stationery,cement,sand,stone chips and bricks. kindly update me as soon as possible. With Regards, Jitendra Giri

CA Jitender Sharma

CA Jitender Sharma (Expert)
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24 March 2014 kindly clarify your doubt?

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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27 July 2025 Hey Jitendra! Here’s a clear take on **TDS on materials under section 194C** (contractor payments):

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### Is TDS deductible on materials like stationery, cement, sand, stone chips, bricks?

**Answer:**
No, TDS under **Section 194C** is generally applicable on **payment for work or contract services**, **not on the cost of materials** supplied separately.

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### Explanation:

* **Section 194C** covers payments to contractors or subcontractors for **work performed**, such as labor, services, or job work.
* If the contract bill includes **materials supplied by the contractor** as part of the contract price, TDS on the **whole amount (including materials)** may apply, because it is treated as a **composite contract**.
* However, if **materials are supplied separately (reimbursed or purchased directly)** and **clearly indicated separately in the bill**, then TDS **is not deductible** on such material cost.
* Similarly, **stationery** or other consumables supplied separately and reimbursed are generally **not subject to TDS under 194C**.

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### Practical point:

* If you have a **composite bill from contractor including material and labor**, TDS is on **full amount**.
* If materials are **billed separately** (e.g., materials procured by you directly or reimbursed to contractor with invoice), **no TDS on materials**.

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### So, in your case:

| Item | TDS under 194C applicable? |
| --------------------------------------------------------------- | ----------------------------------------- |
| Materials (cement, sand, stone chips, bricks) billed separately | No |
| Materials included in contractor’s composite bill | Yes (on total amount including materials) |
| Stationery (if reimbursed separately) | No |

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Let me know if you want me to share relevant sections or any practical examples!

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