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TDS Query

Mayank (Sr.Accountant) (152 Points)

27 April 2011

Hi friends

I want to know that if we are making a purchase of stationery on which our company name & address is printed and all the material is supplied by the seller.

Is it a contract & does it create a liability of TDS or not?

Thanx

Reply soon

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15 Replies

Devendra (Chartered Accountant) (4775 Points)
Replied 27 April 2011

NO TDS LIABILITY ON PURCHASE OF STATIONERY ITEMS. THRE IS NO CONTRACT.

REGARDS,

DEVENDRA

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(Guest)

Section 194C is attracted if

- Transaction is with the same supplier in each case.

- the quantum of transacions exceeds the limit specified.

In your case if the above conditions are satisified than 194C will be attracted or else not.

Devendra (Chartered Accountant) (4775 Points)
Replied 27 April 2011

But the transaction relates to sale and purchase of stationery. There is no contract as such in the above mentioned case. So there is no liability for the deduction of TDS.

In the above given transaction only VAT will be levied by the seller.

Regards,

Devendra

SUMRANI SADIQ (PROP.) (30 Points)
Replied 27 April 2011

DEAR SIR

DURING THE F Y 2011-12 OUR COMPANY IS PAYING MORE THAN Rs. 5 LACS. TO TRANSPORTER WHO IS OWNER OF MORE 1 TRUCK

FOR PROVIDNG TRANSTPORTATION SERVICE & ISSUE US COPY OF P A N THAN REQUI. TDS OR NOT ?

SUMRANI SADIQ (PROP.) (30 Points)
Replied 27 April 2011

DEAR SIR,

UNDER SERVICE TAX ACT WE ARE SELLING OUR MATIRIALS ON F O R BASIS AND TRANSPORATATION PAID BY US

TRANSTPORTER ISSUES BILLTEE WITH REMARK OF SERVICE TAX PAYABLE BY CONSIGNEE THAN AS PER ACT WHO IS RESPONSIBLE TO PAY SERVICE TAX

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Devendra (Chartered Accountant) (4775 Points)
Replied 27 April 2011

No need to deduct TDS on Transportation of Goods Service, if the transporter submits PAN.

Regards,

Devendra

CA. Shushil Kumar (Partner) (235 Points)
Replied 27 April 2011

Originally posted by : SUMRANI SADIQ
	DEAR SIR DURING THE F Y 2011-12 OUR COMPANY IS PAYING MORE THAN Rs. 5 LACS. TO TRANSPORTER WHO IS OWNER OF MORE 1 TRUCK FOR PROVIDNG TRANSTPORTATION SERVICE & ISSUE US COPY OF P A N THAN REQUI. TDS OR NOT ?

As per amendments made in Sec 194C vide Finance Act 2009,"No deduction shall be made from any sum credited or paid ..................during the previous year to the account of contractor during the course of business of plying, hiring, or leasing goods carriages, on furnishing of his PAN, to person paying or crediting such sum".

So No Tax to be deducted in this particular case

dinesh kaushik (accounts officer) (21 Points)
Replied 28 April 2011

what is tds rate for companies organising education exhibitions

regds

Rachit (Analyst) (913 Points)
Replied 28 April 2011

Originally posted by : Devendra
	But the transaction relates to sale and purchase of stationery. There is no contract as such in the above mentioned case. So there is no liability for the deduction of TDS. In the above given transaction only VAT will be levied by the seller. Regards, Devendra

There is No liability for deduction of TDS u/s. 194C for the following reason:

Payments to contractors

194C (3) Where any sum is paid or credited for carrying out any work mentioned in sub-clause (e) of clause (iv) of the Explanation, tax shall be deducted at source—

(i) on the invoice value excluding the value of material, if such value is mentioned separately in the invoice; or

(ii) on the whole of the invoice value, if the value of material is not mentioned separately in the invoice.

Explanation.—For the purposes of this section,—

(iv) “work” shall include—

(e) manufacturing or supplying a product according to the requirement or specification of a customer by using material 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.

Arun A P (Learning thro experience) (64 Points)
Replied 28 April 2011

Originally posted by : Mayank

Hi friends

I want to know that if we are making a purchase of stationery on which our company name & address is printed and all the material is supplied by the seller.

Is it a contract & does it create a liability of TDS or not?

Thanx

Reply soon

First Understand the basic concept of TDS:

1. TDS not applicable on any purchases of goods.

2. TDS Applicable only on any services received.

3. TDS on sub-contract is for labour charges only and not on goods. If there is no bifurcation between labour charges and the material part. U are ought to deduct it on the whole bill value.

Hope this will makes u a little bit understandable.

Thanks & Regards