TDS on VAT bill

This query is : Resolved

CA Parwin (Querist)
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03 July 2008 our company has given a interior decoration contract. bill raised by the interior decorator includes VAT. whether TDS has to be deducted on the full invoice value or excluding VAT component?

CA Abhishek Tyagi

CA Abhishek Tyagi (Expert)
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03 July 2008 Dear Parwin,

The invoice raised by the interior decorator may have two component. One is for the services rendered by him for you on which service tax will be there & second one is for the material provided by the contractor on which vat will be charged. As far as the tds provisions are concerned you have to deducted tds under section 194-C, only on first part which is for service charges . On purchase of material on which the vat will be charged by the contractor, there is no need to deduct the tax. IF there is no bifurcation given in the invoice, you can ask for the bifurcation of amount in two components- service charges & for supply of material.

Hope this will resolve your querry well.