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Tds on commercial coaching and training

Kapil (Student MBA) (25 Points)

08 May 2014

Dear All,

I have registered as a Sole Propertiership called "BroSisCo" providing Commercial Coaching and Training Services. I have a service tax number.

If a Pvt Ltd. company sends 10 of its employees to me for training and I issue a invoice from BroSisCo billed to the other company Pvt Ltd., will TDS be deducted from the payment made to BroSisCo.

At what rate will TDS be deducted if applicable?

Thanks

Kapil

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6 Replies

Mahesh Yadav (Sr. Accounts Executive) (22 Points)
Replied 08 May 2014

Originally posted by : Kapil

Dear All,

I have registered as a Sole Propertiership called "BroSisCo" providing Commercial Coaching and Training Services. I have a service tax number.

If a Pvt Ltd. company sends 10 of its employees to me for training and I issue a invoice from BroSisCo billed to the other company Pvt Ltd., will TDS be deducted from the payment made to BroSisCo.

At what rate will TDS be deducted if applicable?

Thanks

Kapil

The condition is

1. When you generate bill , is that you had charge service tax .

2. Are you a filling the service tax return.

If you had fullfill both the above condition then they will deduct TDs on your bill @ 10% on professional Fess.

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Kapil (Student MBA) (25 Points)
Replied 08 May 2014

Dear Mahesh,

Thanks for your prompt reply. Can I engage in work as a contractor with the said company so that the TDS deductable comes to 1% or 2%.

Does contract work limit itself to physical construction or even to IT work.

How do I establish that I am working as a contractor with this company.

Kapil

Income Tax Wala: (Fin. Expert) (Chartered Accountants) (2015 Points)
Replied 08 May 2014

Dear kapil

since you are providing professional service (training services is comes under prof service) to employee of comapany.

we can't say that only construction services comes under contractor service. job work, placement agencies etc also a contractual nature of service

you are not a contractor as you are

(Guest)

According to Lloyds Register Industrial Services (India) Pvt. Ltd. vs. ACIT the training fee cannot be termed as “fee for technical services” and no TDS is to be deducted from the same.

But then , it is safer for the payer to adopt a conservative approach and deduct TDS @ 10% 194J

Mahesh Yadav (Sr. Accounts Executive) (22 Points)
Replied 15 May 2014

Dear Kapil,

Sorry, i was not answer your Question later.

Kapil, you are providing Only the technical service to Pvt. Ltd. Organisation, In the same senario they will deduct TDS on 94J on professional if your bill cross the exemption limit.

In case if your are providing Technical + Residence + Food + Seminor/Confrence+Night Stay etc. to Pvt. Ltd. Org. then in that the liability comes in Sec 94C @ 1%.

Regards

Mahesh Yadav

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SK. MAKSUD (ACCOUNTS MANAGER) (40 Points)
Replied 14 July 2018

The Delhi tribunal has held that payments to institutions providing technical training to employees of assessee are not payments for pro-viding professional services and would not attract withholding tax provisions of 194J.

The assessee, a joint venture company, made payment (including tuition fees and training-related expense) to a management development institute for providing advanced management training to its director without withholding any tax (TDS).

According to the assess ..