Tds should deduct ??

Page no : 2

CA Ruchika (CA) (27 Points)
Replied 13 June 2012

I totally agree with rahul khatter

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CA Ruchika (CA) (27 Points)
Replied 13 June 2012

i agree with rahul khatter

satya (Accountant) (26 Points)
Replied 13 June 2012

No TDS should be applicable.

jean (article assistant) (113 Points)
Replied 13 June 2012

@ raul khatter ,

dear friend

the main problem is that the invoice contains service tax also, so the vendor is providing some sort of service whaterver the nature be.

the service may be in the nature of royality.

no doubt, tds shall not be deducted on cost portion of the windows software.

Prachi Fanse (student) (21 Points)
Replied 13 June 2012

Originally posted by : Digambar Kundaram
	A Window software purchased by a customer worth rs. 49692/- (including service tax and vat), While making of payment towards this invoice should he deduct TDS as he received invoice with Service tax ????

I agree with Mr. Amit Prajapati. In this transaction a product is purchase. The customer is not receiving any personalised service. Hence it cannot be termed as a contract. TDS should not be deducted on this transaction.

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Prateek Agarwal (Sr. Executive - Finance & Accounts) (1732 Points)
Replied 13 June 2012

Dear All,

Purchase of software is a unique transaction wherein the amount is inclusive of both VAT and service tax.

The software purchased in this case I assume is a Microsoft Open License which gives a right to use the asset to the purchaser. Hence, service tax is charged. This right to use is kind of royalty paid to the buyer. Hence, TDS @ 10% u/s 195J needs to be deducted.

Even if it is not a License, it is still a service provided directly or indirectly, since service tax has been charged, else, it would not have been charged. So, TDS @ 2% u/s 194C shall be deductible in this case.

Hope this clears all doubts.

Regards