Whether TDS u/s 194C applies on car servicing charges

Poonam (Sr.Fin.Executive) (84 Points)

21 October 2010  

Hi, Suppose a manufacturing company owns 4 vehicles. These vehicles are used by the board of directors. On recurring basis, company incurs expenditure on maintenance and servicing of these vehicles. Such expenses are in the range of Rs 50k per vehicle. Servicing is done by the authorised motor repair shops. The bill from such shops is partly for labour payments and for materials. Whether the company needs to deduct TDS on the labour charges?