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

is TDS applicable

shruti (CA) (80 Points)

09 April 2009

Whether TDS needs to be deducted for payment for B checks of DG sets, kind of check to service and improve the over all efficiency of the DG set . The Vendor is showing separately in the bill the cost of Material used during the checks and is also charging VAT on it. Plus he is separately showing service charges on the manpower cost with service tax on this amount. Is TDS deductible under section 194C and on what amount.

Reply
Follow
Share

9 Replies

Nitesh (service) (136 Points)
Replied 09 April 2009

Tds under contract 194c on labour plus service tax amount. Deduct @ 2.266% for safer side.

Rgds./Nitesh

Upgrade to CAclubindia Pro. Subscribe Now!

Jyoti Malik (ACCOUNTANT) (2644 Points)
Replied 09 April 2009

TDS on manpower cost with service tax u/s 194C @ 2.266%

Darshit (CA Final) (964 Points)
Replied 09 April 2009

Shruti if the bill of man power exceeds 20000 or the amount of the party which u r referring has issued the bill of man power worth Rs 50000 in the whole year than TDS is applicable or else not

S. K. Jangra Advocate (Advocate) (62 Points)
Replied 13 April 2009

Plz help me i am service man in govt. job. i have received 5th pay comm. arrear which has been receiable in A.Y 2008-09 but i have no received for the last A. Y. Secondly i have received a sum of Rs. Approx 55,000/- towards 5 th pay comm. & 6 pay Comm Arrear. Wts kind of my Tax liabilities. Employer had been deducted tds from my salary & arrear but my salary income not taxable (Total Gross Salary Rs. 72000/-) How can claim for TDS. plz reply me..... sunil_jangra2005 @ rediffmail.com

Vinay Chopra (CA ) (197 Points)
Replied 13 April 2009

hi Shurti,

Sec194 C provides where "any payment" is made to resdent contractor fr wrks contract then TDS is appliacble. Where the contract is for sale TDS is not aplliacble.Howevre Bard has clarified in its Circular No. 715 that if abill is inclusive of raw material cost or other expenses to be reimbursed to the contractor TDS will be appliacble if it has been charged in the same bill. However, in the case of William Schwabe India Delhi Bench f Appellate Tribunal examined the case of circular 715 and held that if the cntractor raises seperate bills then TDS will not be applicable.

In ur case since seperate bills have been raised there is no question of TDS.

Upgrade to CAclubindia Pro. Subscribe Now!

Nitesh (service) (136 Points)
Replied 15 April 2009

Dear Shruti,

I have reservations regarding non applicability of tds for txn just mentioned by some members during discussion.

I woul like to recall the Guidelines pursuant to supremen court decision in Associated Cement Co. Ltd V CIT (1993) 201 ITR 435, The CBDT hasissued guidleines regarding applicability of provisions of section 194C.

Section 194C applies to all types of contract including the service contract.

The txn narrtaed by you says that is an txn for servide of DG Sets and Improving the efficiency of DG Sets.Definately it is not a Contract for Sale of Goods nor it is a works contract.It is a service contract and porperty in DG Set was not of the vendor. Also by entering into this contract there is nothing that vendor has created a asset which will be utilised only by you

My view is TDS under 194C will be deducted.

Rgds./Nitesh

K.Pandu (Sr.Manager-Finance) (22 Points)
Replied 15 April 2009

Hi,

What is the applicability TDS on Printing on Posters ( posters supplied with specif company mater with materail with CST)

Please clarify the TDS applicability?

Regards,K.Pandu

Vinay Chopra (CA ) (197 Points)
Replied 15 April 2009

hi nitesh,

In this connection v need to consider the case of Whirpool India Ltd in which the court held that if contractor uses own rw material, own machinery merely coz contractee gives specifications of the buyer, it is a case of sale of goods and job work Similar decison was given in Power Grid Corp of India. Moreover since the contractor is charging VAT in that case it is a pure sale contract. However the contractor needs to raise seperate bills for this otherwise TDS on full amount will be applicable.

vijay (.) (212 Points)
Replied 20 April 2009

hi Shruti

under Section 194C u have to deduct TDS where the amount of a single bill is More than Rs. 20,000 or you are paying off more than Rs. 50,000 annualy to a single party.