Advance given against purchase of material is it liable for TDS.Contact entered is inclusive of material cost (i.e labour and material) Can you please explain the provisions regarding thisi n detail, with sections and circular nos if any
shibin.s.pullan (student) (116 Points)
15 January 2010Advance given against purchase of material is it liable for TDS.Contact entered is inclusive of material cost (i.e labour and material) Can you please explain the provisions regarding thisi n detail, with sections and circular nos if any
Vivek
(Finally passed CA Final...!!!!!)
(1097 Points)
Replied 15 January 2010
TDS must be made either on payment or on due basis, whichever is earlier. Hence, TDS must be made on advance...
Aditya Maheshwari
(CA in Practice)
(35867 Points)
Replied 15 January 2010
If composite contract is entered into then deduction of TDS needs to be decided on a case to case basis because as per new definition of work as per section 194C which is as under:
(iv) “work” shall include—
(a) advertising;
(b) broadcasting and telecasting including production of programmes for such broadcasting or telecasting;
(c) carriage of goods or passengers by any mode of transport other than by railways;
(d) catering;
(e) manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from such customer,
but does not include manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from a person, other than such customer.]
So if you fall in the above creteria then the same will not be liable for TDS. However more details needs to be furnished.
Deepak Tapse
(Accounts Manager - Taxation)
(1771 Points)
Replied 16 January 2010
If Material cost and labour cost is mentioned seperately, then tds to be deducted only on labour otherwise on full bill value
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