CA Anuj Mittal (Finance Manager) (66 Points)
15 September 2011We hired the Plant and machinery in Haryana, we are receiving the Bill of rent including local VAT, i want to know about the applicability on TDS deduction on this transaction.
ARUN KUMAR
(Financial Consultant )
(992 Points)
Replied 15 September 2011
Sir,
In My View it is not Possible To Add VAT on Rent bill.Only Service Tax Will Charged.
Pradip
(Accountant/Management)
(106 Points)
Replied 15 September 2011
I think Mr. Arun is correct. Sales Tax will not applicable for Rent, however service tax may be charged only and in this case TDS will be deducted on the amount excluding service tax.
CA Anuj Mittal
(Finance Manager)
(66 Points)
Replied 15 September 2011
As per haryana VAT ruling, anyone can charge the VAT of Hired Plant & machinery, Problem is that, what the TDS will be deducted on that.
CA Anjali Aswal
(CA)
(215 Points)
Replied 15 September 2011
As per article 366 of constitution sale also include tax on transfer of right to use any property whether for a specified period or not. Lease of plant & machinery is a deemed sale thats why Local VAT has been charged. You can deduct TDS on the bill cause ultimately you are using the service which comes under the purview of TDS.
C.A. Sandeep Wawhal
(CA, PGDFM, BCom)
(1831 Points)
Replied 15 September 2011
Mr. Arjun Kumar TDS is applicable @ 2% under Sec. 194I State Vat matter will not change the Income Tax (Central Govt Tax) rules.
Puja das
(Chartered Accountant)
(34 Points)
Replied 15 September 2011
Circular No.4/2008 dated 28.04.2008 states that TDS is not to be deductible on service tax component on rent.The reason given by CBDT are that provisions of section 194-I requiers deduction of tax at sources on "any income by way of rent" therefore neither service tax nor vat should be included for TDS purpose.
C.A. Sandeep Wawhal
(CA, PGDFM, BCom)
(1831 Points)
Replied 15 September 2011
Anjali Aswal - as you explain, but it is not mentioned in article whether it is direct tax or indirect tax.
please confirmed.
asoltech
(CA)
(24 Points)
Replied 15 September 2011
We have purchased boarding passes and received bill including VAT @ 5%
Do we too hve to add VAT while raising a bill to a party to whom we sell those passes.?
Sourav Modi
(Learner!)
(306 Points)
Replied 15 September 2011
| Originally posted by : CA Anjali Aswal | ||
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As per article 366 of constitution sale also include tax on transfer of right to use any property whether for a specified period or not. |
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Although your solution is perfectly correct, just a little modification - It will be rather 'tax on the sale or purchase of goods includes......'
Sourav
CA Anjali Aswal
(CA)
(215 Points)
Replied 15 September 2011
Mr. Sandeep it is an indirect tax. It is covered in the VAT syllabus of C.A. Final. You take reference of book.
asoltech
(CA)
(24 Points)
Replied 15 September 2011
thanks sourabh
should add VAT @ 5%
also under which accounting head both VAT input and VAT output should come?
C.A. Sandeep Wawhal
(CA, PGDFM, BCom)
(1831 Points)
Replied 15 September 2011
TDS is not deducted on Bill amount if service tax charged, so deduct tds on net amount of rent.
C.A. Sandeep Wawhal
(CA, PGDFM, BCom)
(1831 Points)
Replied 15 September 2011
OK Anjali thanks ..........
CA Navin Jain
(MANAGER (FINANCE & ACCOUNTS))
(11768 Points)
Replied 15 September 2011
@ ANUJ,
VAT IS APPLICABLE ON HIRING OF PALNT AND MACHINERY. DEDUCT THE TDS @ 194I @ 2% ON THE TOTAL BILL VALUE.
Landmark Judgments: Important Provisions of the EPF & ESI Act interpreted by the Honorable Supreme Court of India
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