Sasidhar Aruljothi (C.A FINAL) (187 Points)
22 March 2011For supply of materials as per our specification, we sign an agreement with a manufacturer and he manufactures and supplies us without taking raw materials from us. He claims VAT in the bill.
Because we have entered into an agreement with him, is it a contractual payment and does it involve TDS
sudhakar ca cwa
(service)
(1518 Points)
Replied 22 March 2011
It is a trading activity. so TDS is not applicable in this case.
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 22 March 2011
TDS is applicable on expenditure , not on purchase.
arjun s
(CA Final)
(299 Points)
Replied 23 March 2011
TDS is not applicable as because
1. he is delivering goods to you - Not an expense
2.He is charging VAT hence he gives you sales invoice - it is a sale
3.Sale does not amount to contract.
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