Hi,
We are purchasing every month Stationeries and House Keeping Materials from one Vendor and also he charging K-VAT. My Question is for this we have to deduct TDS or Not???????? Pls clarify....
Awaiting for your valuable replies.............
23 Replies
Jayesh
(Internal Auditor)
(214 Points)
Replied 11 October 2011
Dear Vijaya,
Purchase of material does not attract TDS provision. TDS Provisions are attracted where transaction involves an element of service.
Therefore, in your case, you do not have to deduct any TDS.
Hope this solves your query.
Rakesh
(Executive- Commercial & CMA final student)
(179 Points)
Replied 11 October 2011
Fully agree wtih Jayesh
vijaya kumar n
(JOB)
(488 Points)
Replied 11 October 2011
I agree, but if we purchase rarely then TDS is not applicalbe. But we purchasing the items regularly. both are entered a contract , the vendor will become a contractor. Then TDS applicalbe or not.
Mihir
(Wealth Manager)
(5293 Points)
Replied 11 October 2011
Its contract to sell stationary and not contract to provide some specific services. TDS does not apply.
CA Leanne Santos
(CA)
(39 Points)
Replied 11 October 2011
Provision of Sec 194C are not applicable for payments made under the contract of sale of goods. hence no TDS on the above contract.
ANUP GUPTA
(KEEP SMILING fcaanupgupta@gmail.com)
(303 Points)
Replied 11 October 2011
Sec. 194C talk about contract for carrying out any work & ur case is not covered in defn of work so u need not to deduct tds.
Swapnil Jain
(Finance - FP&A)
(564 Points)
Replied 11 October 2011
TDS not applicable...it's only sale of goods...no service involved...so no TDS provisions
Ashutosh Biswal
(Asst.Manager Finance)
(283 Points)
Replied 11 October 2011
Dear all
TDS (Tax deduction at source) is not only mean to Income tax ..it has also mean to sales tax (State VAT).
Yes, this tds is applicable (optionally) to some states, where buyer do deduct tds in line issue a certificate of credit to its seller, carrying that amount of deduction .
buyer usually deduct TDS on Vat receivable with respective percentage like 2 or 4 and deposit the same to govt treasury, with further issuance of a certificate. Certificate are usually issued quarterly/half yearly or yearly basis.
CA PRAVEEN SINGH
(MANAGER ACCOUNTS)
(2277 Points)
Replied 11 October 2011
no tds applicable on purchase of goods....
applicable on contract of services...........
(Guest)
The chapter of TDS was basically incorporated in Income Tax Act to provide a mechanism by which government revenue could be secured at early stages to prevent it from tax evasion at later stages (i.e. at the time of assessment). Since, TDS is deducted as per the provisons of Income Tax Act, hence it is "Income Tax Deducted At Source" in short TDS. Sales receipts for goods cannot be equated with income, hence no TDS is charged on the payment for sale of goods. But its different in case of provision of services.
I just provided the logic for not deducting TDS on the gives case.
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