I am working in a Production house, we are purchasing costumes for actors from dress designers. in there bill they written like 1- Designer fee & Costume cost and ST charged on both, 2-the designer fee and costume charges shown separate and ST charged on Designer fee only, 3-some times we have the contract with designer and in the contract clearly mentioned the design fee and the cost of costume separately or one single amount also mentioned for the both work....
My qustion is on what amount i deduct TDS @what rate under which section for above 3 conditions.....
19 June 2013
If you are not supplying the material, it is out right purchase transaction so TDS need not be deducted. Similary service tax should not be charged on this transaction but provision of VAT is applicable as this is purchase. (you may request them to raise the bill on without charging service tax. If they do not comply with your request, plz deduct 10% TDS as fees for professional/technical service on entire amount)
If you are supplying the material, then the bill amount should include only designer fee and service tax. In this situation, deduct TDS on bill amount.
But if we do an agreement with that designer and in agreement it is clearly mention that X amount for designing and Y amount for dress purchase & Rs Z for hiring of dress , then shall we deduct TDS on designing fee @10% & on Nil TDS on purchase & TDS @ 2 % for hiring. Also that party given invoice separately........plz suggest..
25 June 2013
Personal agreements cannot override statutory provisions. Whenever there are conflicts between provision of personal agreements and statutory provisions, statutory provisions prevail.
If you are not supplying materials, then it is purchase transactions (whatever may be the nomenclature of invoice) hence it do not attract provisions of TDS. But attracts provisions of VAT.
If you are supplying materials, then it will attract the provisions of TDS and provisions of service tax (if applicable) but not the VAT. In case of hiring of dress is concerned, TDS is applicable.
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