Ad-Free CAclubindia and Daily Updates on your mobile. Subscribe Now!

TDS on Bills for material & services

10 April 2010

A bill is raised for material supplied & for services rendered, mentionning saperately the amount for materials & services. On what amount TDS will be deducted and under what section.

Pls, answer the above question with the concept.

Thanks

Reply
Follow
Share

2 Replies

Ratan Deep Saxena (Asstt Manager (Accounts & Finance)) (2998 Points)
Replied 10 April 2010

TDS U/s 194 C.

regards,

ratan

Upgrade to CAclubindia Pro. Subscribe Now!

Ratan Deep Saxena (Asstt Manager (Accounts & Finance)) (2998 Points)
Replied 10 April 2010

TDS in case of JOB work according to specification(brief):In case of work contract being manufacturing or supplying product according to specification(by using material from such customer),tds shall be deducted on the invoice value excluding the value of material purchased from such customer,if such value is mentioned separately in the invoice.where the material component has not been separately mentioned in the invoice,tds shall be deducted on the whole value of the invoice.

Relevant clause of new section :is reproduced hereunder

EXPLANATION TO SECTION 194 C

(iv) work shall include

(a).......

(b).......

(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 includemanufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from a person, other than such customer.

subsection (3)

Where any sum is paid or credited for carrying out any work mentioned in sub-clause (e) of clause (iv) of the Explanation, tax shall be deducted at source

(i) on the invoice value excluding the value of material, if such value is mentioned separately in the invoice; or

(ii) on the whole of the invoice value, if the value of material is not mentioned separately in the invoice.

regards,

ratan