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TDS ON WORK CONTRACTS UNDER MVAT (VAT)

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( Author )
18 February 2011

thanks a lot for reply;
one more thing I want to know is that there is a finance company (NBFC) and provisions of VAT are not at all applicable to this finance company since the company does not deal into selling / buying sort of things. however, the company during the year has made huge payments to civil and interior contractors for restructuring of new premises including payments made for furnishing of office and related payments. The finance company is not a registered dealer and hence does not have TIN number for VAT under MVAT.

However, refering to provisions of TDS under MVAT Act for payments made which read as: " Section 31 provides that the Commissioner may, by notification, require any dealer or person or class of dealers or persons (hereafter referred as ‘the employer’) to deduct tax on such amount payable on the purchases effected by them, as may be notified. and it is also provided under MVAT for specified employers to deduct the TDS on amount payable on the purchases effected by them, as may be notified..

My Queries in relation to deduction of TDS amount is as under:

1) can the finance company (NBFC) fall within the definition of specified employers though MVAT is not applicable to it and it is not a registered dealer?

2)the above provisions of section 31 talk about the amount payable on purchases effected by them (ie specified employer);My question is whether TDS is also to be deducted or not on the payments made for work carried out, nature of work being structural and furnishing done at new office premises.

3)if TDS is required to be deducted by finance company; for that, company is supposed to hve Tax deduction number, how the number can be availed? what is procedure?

4) and finally, if TDS is anyhow required to be deducted for payments made even on civil structural and furnishing done at new office premises (work contract as generally we call it), and company has not deducted the TDS on the payments have already been made. CAN TDS now be deducted (after obtaining TDS number from sales tax department)on the amount (which have already been paid) and deposited with Exchequer along with interest. what would be the rate of interest since TDS is supposed to be paid late as of now..???

can anyone explain the same on the above issues??


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