CA.Varalakshmi.M (Manager-Finance) (482 Points)
07 August 2012Hi ,
Suppose we get an invoice for purchase of customised software as follows (They charge both VAT and ST as apart from selling of software product they are providing implementation and maintenance services-We cant bifurcate amounts on which VAT and ST to be charged)
Basic amount 100
ST @ 12.36% 12.36/-
Vat @ 5% 5/-
Gross 117.36
Do we need to deduct TDS on 117.36/- ?
Is it a professional serivce?194J?
Thanx in advance
Hemant Kumar
(Accounts Manager MBA (Fin) CMA*)
(6450 Points)
Replied 07 August 2012
CA.Varalakshmi.M
(Manager-Finance)
(482 Points)
Replied 07 August 2012
Thanx Hemanth but this transaction comes under right to use goods, so do we need to deduct TDS ?
and doesnt it comes under providing professional services as they are proving implementation and maintenance services...
bhavik mehta
(C.A.)
(526 Points)
Replied 07 August 2012
yes, as per my opnion ,
you required to deduct tds as Hemant said, even its right to use goods .
because in right to use goods , the basic thing is you get 1year/more years contract to use the software rights, and required to deduct TDS subject to 94C.
llllVICTORllll
(Internal Auditor)
(511 Points)
Replied 07 August 2012
The thing is varalakshmi, if the bill seperately mentions the taxable service component then you may deduct TDS only on work conducted, if its not mentioned then on whole bill amount,... i mean to say there should be clear bifurcation between service component and material component. and being computer software, i am not sure if VAT is applied only of CD its being written on, or anything else.. VAT on computer software still puzzzles me
CA.Varalakshmi.M
(Manager-Finance)
(482 Points)
Replied 07 August 2012
@ Bhavik
ok suppose we have another client ,we are providing only implementation and maintenance services to that particular client.
Do we need to deduct TDS under 194C or J?
Hemant Kumar
(Accounts Manager MBA (Fin) CMA*)
(6450 Points)
Replied 07 August 2012
CA.Varalakshmi.M
(Manager-Finance)
(482 Points)
Replied 07 August 2012
Oh thank you Hemanth,
Can you please guide me what type of services comes under Professional and Technical services?
Hemant Kumar
(Accounts Manager MBA (Fin) CMA*)
(6450 Points)
Replied 07 August 2012
/articles/an-overview-of-section-194-j-of-income-tax-3926.asp
CA PRAVEEN SINGH
(MANAGER ACCOUNTS)
(2277 Points)
Replied 08 August 2012
| Originally posted by : Hemant Kumar | ||
 |
Yes... You should have to deduct 2 % TDS (Company/ firm/Coop Soc/Local Authority) or 1%( individual HUF) on Total Billed Amount i.e.117.36 Under Section 194C. |
 |
YES AGREE......
CAclubindia
