Tds

This query is : Resolved 
 

(Querist)
09 January 2017

Dear Sir,
My company has organised a cultural program me for all staff & there we have place order for Food packets & Tea/Coffee for that Vendor has submitted VAT bill for Rs. 38071.00 Is TDS is applicable on this bill amount? Please clear so that i am able to pay him. As he is chasing for payment everyday.
Regards,
Chetan


Sandeep Dharar (Expert)
09 January 2017

As per me TDS should not b charged on that invoice. U must ask the vendor to raise the invoice in name of ur company, and u may pay to him accordingly(as per management policy).

Mrs. N Jain (Expert)
09 January 2017

This service comes under the category of Catering service and therefore TDS u/s. 194C need to be deducted

Chetan (Querist)
09 January 2017

Now, i am confused? Can any one will clear the query properly.

Gokul Sharma (Expert)
09 January 2017

yes this will come under contract but limit is within so no need to deduct tds
limit is single bill - 40000 or above tds is required to deducted
annual limit - 100000 or more tds required to be deducted

Mrs. N Jain (Expert)
09 January 2017

As per section 194C the limit of single bill is 30000.00 up to which no TDS required to be deducted provided amount in the FY is not likely to exceed or exceeds Rs. 1 Lakh.
Please note the relevant provision as under
194C(5) No deduction shall be made from the amount of any sum credited or paid or likely to be credited or paid to the account of, or to, the contractor, if such sum does not exceed thirty thousand rupees :
Provided that where the aggregate of the amounts of such sums credited or paid or likely to be credited or paid during the financial year exceeds 5[one lakh] rupees, the person responsible for paying such sums referred to in sub-section (1) shall be liable to deduct income-tax under this section.

Sandeep Dharar (Expert)
09 January 2017

This is not a contract as such. If this is the process, then one should deduct TDS on all food bills, if the amount in the year crosses 1L. They just purchased food during a cultural programe, and this dosen't attract TDS.

Gokul Sharma (Expert)
09 January 2017

thanks for correction

Mrs. N Jain (Expert)
09 January 2017

@ Mr. Sandeep, TDS is not applicable if food is served in restaurant/s. It is applicable if the food is served in places other than the restaurant/hotel e.g. in an event, a festival, in factory by a caterer etc. Kindly refer the clarification of department vide circular No. 715 of 8/8/1995

Sandeep Dharar (Expert)
09 January 2017

@ Mrs. N Jain, I haven't notice anything regarding that in the mentioned circular. Well, as per me TDS should not be deducted on that transaction.



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