Dear Members
A manufacturing company is having an canteen for its employees on its own premises. The canteen has been outsourced to a catering contractor. The contractor raises two separate bills every month One bill for supply of food and another bill towards labour charges.
For Example : Bill 1 - Supply of 1500 food @ Rs.20/- each for the month of Feb 2009 = Rs.30,000/-
Bill 2 - Labour charges for the month of February 2009 = Rs.10000/-
The company deducts TDS only from the labour bill. TDS is not deducted from the food supply bill.
Kindly advise whether the procedure followed by the company is correct?
with regards
Muralidharan
CAclubindia
