TDS Rate on data entry
This query is : Resolved
02 March 2009
What is rate of TDS on data entry charges.
Also what should rate of TDS on raisng salary bill for provding 3 staff to one company for doing data entry
Also what should rate of TDS on raisng salary bill for provding 3 staff to one company for doing data entry
02 March 2009
Dear Samir,
its seems the case of 194C- Contract.
TDS Rate - 2% + cess
its seems the case of 194C- Contract.
TDS Rate - 2% + cess
02 March 2009
If the work is not related to some technical services, then I also think it must be covered in section 194C.
02 March 2009
There is no professional or technical knowledge involved in data entry. Our Company is also adopting the same rate.
Base for affecting TDS is grossl amount including Salaries of three staff. This is because three staff are treated as "employees" of Agency which undertakes data entry.
Generally Agencies carrying out data entry work prefer to raise seperate bill towards salaies of persons engaged by it for data entry work and insist on affecting TDS only on "service charges". Acceptance of such requests will lead to several complications not only from TDS point of view but also Labour Laws including PF, ESI etc.
It is always desirable to fix rate for each record or some such method without a single word about employee(s)engaged by Agency for data entry work. No. of employees required to carry out the work within the desired time schedule may be considered for negotiation purpose, that is a different matter
Base for affecting TDS is grossl amount including Salaries of three staff. This is because three staff are treated as "employees" of Agency which undertakes data entry.
Generally Agencies carrying out data entry work prefer to raise seperate bill towards salaies of persons engaged by it for data entry work and insist on affecting TDS only on "service charges". Acceptance of such requests will lead to several complications not only from TDS point of view but also Labour Laws including PF, ESI etc.
It is always desirable to fix rate for each record or some such method without a single word about employee(s)engaged by Agency for data entry work. No. of employees required to carry out the work within the desired time schedule may be considered for negotiation purpose, that is a different matter
02 March 2009
Thanks for the detailed explanation.
Another question what if the ca firm raise a bill on client for providing data entry charges by sending his staff at the client end.The work relates doing accounting data entry.Will it still be decuted under contract or professional?
Another question what if the ca firm raise a bill on client for providing data entry charges by sending his staff at the client end.The work relates doing accounting data entry.Will it still be decuted under contract or professional?
04 March 2009
Querist is advised to take note of the following
"CHARTERED ACCOUNTANTS SERVICES
The appellant, a chartered accountant firm had undertaken activities relating to billing and accounting work, ledger and record maintenance and data processing. The Tribunal observed that such activities are carried out by persons other than practising chartered accountants and also by unskilled employees on contract basis. It was therefore held that, such activities were not performed in the course of duties performed by chartered accountant and therefore not liable to service tax.
CCE, Tirupathi vs. Umakanth & Co. 2008 (9) STR 527 (Tri-Bang.)
The appellant, a chartered accountant, entered into contract with APCPDCL / AP Transco to carry out the activity of billing for them. The Revenue demanded service tax under Chartered Accountancy Service on receipts from such activity.
The appellant contended that billing was only a clerical activity and such contracts were even granted to non-chartered accountants. The work was done by staff who were not even SSC. The Tribunal relied on the decision rendered by the Larger Bench in the case of CCE vs. Umakanth & Co. and allowed the appeal.
Sri Mogam Pullaiah vs. CCE, Guntur (2008 TIOL 469 CESTAT Bang.)"
The above is sourced from the following: http://www.aiftponline.org/journal/Aug08/Service_Tax.htm
Applying the above logic, I opine that TDS has to be affected on data entry work applying TDS rate applicable for Contracts only and not the one applicable for Professional Services notwithstanding that the work is carried out by a firm of CAs
"CHARTERED ACCOUNTANTS SERVICES
The appellant, a chartered accountant firm had undertaken activities relating to billing and accounting work, ledger and record maintenance and data processing. The Tribunal observed that such activities are carried out by persons other than practising chartered accountants and also by unskilled employees on contract basis. It was therefore held that, such activities were not performed in the course of duties performed by chartered accountant and therefore not liable to service tax.
CCE, Tirupathi vs. Umakanth & Co. 2008 (9) STR 527 (Tri-Bang.)
The appellant, a chartered accountant, entered into contract with APCPDCL / AP Transco to carry out the activity of billing for them. The Revenue demanded service tax under Chartered Accountancy Service on receipts from such activity.
The appellant contended that billing was only a clerical activity and such contracts were even granted to non-chartered accountants. The work was done by staff who were not even SSC. The Tribunal relied on the decision rendered by the Larger Bench in the case of CCE vs. Umakanth & Co. and allowed the appeal.
Sri Mogam Pullaiah vs. CCE, Guntur (2008 TIOL 469 CESTAT Bang.)"
The above is sourced from the following: http://www.aiftponline.org/journal/Aug08/Service_Tax.htm
Applying the above logic, I opine that TDS has to be affected on data entry work applying TDS rate applicable for Contracts only and not the one applicable for Professional Services notwithstanding that the work is carried out by a firm of CAs
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