Go Ad-Free on CAclubindia with Daily Mobile Updates. Subscribe Now!

Clarification nedded on section 194C

shibin.s.pullan (student) (116 Points)

15 January 2010

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

Reply
Follow
Share

3 Replies

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...

Upgrade to CAclubindia Pro. Subscribe Now!

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.