Varun Bhat (Student CA IPC / IPCC) (151 Points)
05 September 2016Whether TDS will be applicable if a company (suppose "A") makes an advance payment to another company (say "B") for procurement of materials ?
The situation here is that "A" company has entered into an agreement with "B" company for producing goods on it's behalf. Now "A" company has paid a huge sum of money (say 25 lakhs) to "B" company for procurement of material.
The payment is an advance and invoice is not yet received.
Mohan
(Audit Assisstant & Accounts Manager)
(489 Points)
Replied 05 September 2016
CA Gaurav Ajit Potdar
(Chartered Accountant)
(846 Points)
Replied 05 September 2016
In my opinion its a pure advance for purchase of materials, hence TDS not required.
CA Gaurav Ajit Potdar
(Chartered Accountant)
(846 Points)
Replied 05 September 2016
In my opinion its a pure advance for purchase of materials, hence TDS not required.
Mukesh Kumar
(Accounts Manager)
(1466 Points)
Replied 09 September 2016
SIR
I THINKS
TDS IS NOT REQUIRE IN BUSNIESS OF SALE /PURCHASE INSTEAD OF PROPERTY (VALUE 50 LAC OR ABOVE)
mohammad rasool baig
(Management Consultant)
(1026 Points)
Replied 10 September 2016
“work” shall include-
manufacturing or supplying a product according to the requirement or specification of a customer by using materials purchased from such customer,but does not include manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from a person, other than such customer.
If it does not satisfy the definition of work as per IT Act, then such agreement will be not considered as contract U/s 194C. Hence TDS will not be applicable.
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