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tds query for 194 C

PIYUSH AGARWAL (CHARTERED ACCOUNTANT) (91 Points)

09 December 2008

If a contractor gives a work on a sub contarct to a sub contractor, and a contractor hires a truck for carriage of goods / material to or from sub contractor. Will the activity of hiring trucks would cover as seperate contract or is covered as a sub-contarct?

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4 Replies

(Guest)

HIring of vehicle will be seperate contract and will cover under sec 194c.

the point is disputable one, hence for safer side to comply sec 40 b TDS to be made.

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CA CHINTAN AJMERA (Chartered Accountant) (2987 Points)
Replied 09 December 2008

Yes i think it is treated as seperate contract.

RAJU (LEARNER) (1089 Points)
Replied 09 December 2008

Dear Sir,

I am not sure whether I can clarify you but would like to put my views on the matter. Hope the query is in connection with deduction of tax at source U/s.194C. If hiring of vehicles is a primary contract which in turn is sub-contracted, it is a sub-contract. In present case hiring of vehicles is ancilliary to the main object. Hence, I think it will be a separate contract and not a sub-contract.

Rgds/Dharmaraju

Pavan Jain S (Chartered Accountant) (1575 Points)
Replied 10 December 2008

The Contractor has entered into a contract with other subcontractor for hiring of vehicles. It is a separate sub contract on the following grounds:

· the main contractor has hired vehicles for carriage of goods to sub contractor

· the transportation of goods to and from sub contractor is wholly or partly in pursuance of main contract.

In such cases, no TDS u/s 194C has to be deducted if the sub contractor hiring the vehicles is Resident and do not own more than 2 goods carriages at any time during the PY and he submits a declaration in Form 15I. In any other case, TDS has to be made.

This reply is in accordance with my understanding of the query