Deepak sharma (Learner) (1431 Points)
21 November 2011Hi
Respected Seniors & Friends
If an Interior decorator provide its services with Material & Labour also charging service tax to us, In which head of TDS it comes under,
It will be more appreciatable if reply with sum legal proof like notification or circular.....
Thanks
Regards,
Deepak Sharma
deepak_8583 @ yahoo.com
GHANSHYAM DAS MITTAL
(CA Article)
(44 Points)
Replied 21 November 2011
To be on the safer side TDS should be deducted as Fees for professional fees, since otherwise the department may take a view that the same should be covered under professional fees and will disallow the expenses and other penal provisions will be initiated.
After deducting under professional fees there cannot be any disallowance as TDS is already deducted at a higher rate.
This is my personal opinion. Views may differ from person to person.
Chintan
(Accounts and Finance Executive CS Executive Pursuing)
(98 Points)
Replied 21 November 2011
It should be deducted U/s 194 C
Deepak sharma
(Learner)
(1431 Points)
Replied 21 November 2011
thanks Valji & Chintan Ji....actually we are fighting with a company who deducting TDS u/s 194 J @ 10%
for the same v required written legal proof Or notification..
If possible please provide it. i vll be double thankful to you
thanks
Deepak Sharma
Phalgun
(Audit Manager)
(327 Points)
Replied 22 November 2011
Deepak sharma
(Learner)
(1431 Points)
Replied 22 November 2011
thank you all
i want that notification..which prove Valji & Chintan's opinion is right.
I want that notification which say that above said condition is comes u/s 194C
Please help
Z
( )
(2965 Points)
Replied 22 November 2011
In my opinion they have provided Proffesional service
further Explanation to section 194 J states
‘Professional services’ means services rendered by a person in the course of carrying on legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or advertising or such other profession as is notified by the Board for the purposes of S. 44AA or of this Section.
Services rendered by a person for carrying on profession of interior decoration are included in the definition of professional services. Though the querist is engaged for interior decoration, for applicability of provisions of S. 194J, it has to be seen whether the querist is rendering any ‘professional services’ or whether the querist is merely a ‘contractor’ carrying out the work as specified in the contract entered into with the company.
So if the person providing services is merely a CONTRACTOR and not a PROFFESIONAL , then provisions of 194 C shall applpy
CA LOVELY ARORA
(C.A. B.Com (H) Graduate)
(2151 Points)
Replied 22 November 2011
agree with Z and Falgun and others......
TDS to be deducted u/s 194J @ 10%......
shanil jain
(CHARTERED ACCOUTANCY)
(60 Points)
Replied 22 November 2011
Agreeing with Z one more point to take care is the details provided in the bills.
If it provides for separate cost of material then the payment ot the Interior decorator would be in the nature of Professional Service not including the cost towards materials. the applicabl;e sec would be 194J and Tax rate be 10%
But if the bills is composite and does not show the amount of materials charged then it would be treated like a transaction in the nature of Contract for Work namely Interior Decoration, then the sec attracted would be 194C and rate be 1% or 2 %.
to be on the safer side the payer will deduct the TDS at 10%.
The criteria for professional service and contractual service in your case would be:- Whether you are giving him drawings etc., or not. I you should decide.
If you are not giving drawings and the job executed 'really ' demands professional skill then it is a professional service.
If you are giving drawings etc. (and can prove beyond doubt) then it is surely contractual service.
Again we being Indians take a decision like a cat on the wall then:-
If the value of the contract is only few lakhs -say 2-3 lakhs then you can say though by nature it is called interior work by nature the job done does not demand any professionalism and purely depending on the oral instructions of manager / owner the job is done.(as it can be done by any carpenter) then it is a contract.
If the value of job itself is of good amount say >25 / 30 lakhs then you can not argue like this. It is certainly a professional job.
(The above inference isn drawn after reading various cases pertaining to applicability of service tax + I have good no. of clients who are sub contractors to leading architects. The architets after consultation with their CAs agreed to the above line of thought and said that the architects who got the contract are rendering professional service the sub contractors and the service rendered by sub contractors who does not possess any recognised qualification cannot be professional job. They are only doing under the guidance of professionals.)
Any how wait for more comments.
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