TDS on Printing & Stationery Exp

This query is : Resolved

CA Vishvesh (Querist)
Follow

06 May 2009 If a company in fashion retail industry makes paymnet for printing invitations, envelopes, brochers, letterheads etc in excess of Rs. 50000 in a year. Is TDS u/s 194C is applibale in given scenario????

taxindiaconnect

taxindiaconnect (Expert)
Follow

06 May 2009 A difficult question to answer. This depends whether the contract between the company and the printer is of purchase of goods or a contract to do any work for the company.
However a brief reply would that if the company is paying only for the printing charges than, yes, TDS is applicable u/s 194 as this is a contract of doing some work i.e. printing . For example the cards are being provided by your client to the printer and printer only prints the required material on this and receive the payment for printing of the matter on cards, the contract is in the nature of doing a work. while if the contract is a composit one and the printer provides the cards with printing, in such cases the contract is in the nature of purchase / supply of goods, no TDS is deductible.

You can refer to circular no - 681 and 13/dated 13/12/2006 and circular no 715. The case of the Dabur India,LG Elecronics, Wilmer Schewab may of help to you.