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TDS on Canteen Supplier

(Guest)

IN A MANUFACTURING COMPANY A CANTEEN WAS GIVEN ON CONTRACT

A SUBSIDY OF RS. 4500/- WAS ALSO GIVEN TO THE CONTRACTOR

MONTHLY BILL OF CONTRACTOR INCURRED APPX. 28000/- (INCLUSIVE OF TEA, SNACKS FOR GUEST & EXECUTIVES AND FOODING FOR OVERTIME JOB OF WORKERS) (32500-4500)

IS CONTRACT TAX (U/s 194 C) ATTRACT? IF YES ! ON WHICH AMOUNT.

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5 Replies

Rishubh Mathur (Analyst -Taxation) (442 Points)
Replied 21 June 2008

can you explain nature of subsidy to contractor

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Pankaj Gupta (CS & AGM (F&A)) (67 Points)
Replied 21 June 2008

Yes, TDS is deductible and TDS is deductibel on gross amount of bill.

(Guest)

THANKS MR PANKAJ FOR REPLY.

SUBSIDY OF RS. 4500/- HAS BEEN GIVEN TO THE CONTRACTOR FOR SUPPLYING MATERIAL IN REDUCE RATE.

SOME ONE TOLD THAT THE TDS IS APPLICABLE ONLY ON THE AMOUNT OF SUBSIDY AS HE IS SUPPLYING MATERIAL (TEA , SNACKS, FOOD) SO NO TDS SHOULD BE DEDUCTED ON THE MATERIAL PART OF THE BILL. (AS PER THAT TDS IS APPLICABLE ONLY FOR RS. 4500/-)