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194c applicability on sale bill

Veeresh (Self employed) (123 Points)

23 June 2016

sale made by manufacturing the products using the materials supplied by the purchaser when sale bill including vat given

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(Guest)

can u please elaborate ?

from what i understand u are saying that, the manufactorer used the buyer's materials and sold himj the final product and charged VAT ? is that correct ?

CA Harshal Totla (Chartered Accountant) (2229 Points)
Replied 23 June 2016

Yes Mr.Veeresh, as per section 194C 'work' shall include manufacturing or supplying a product according to requirement/specifications of a customer by using material supplied by such person on which tax needs to be deducted at source under this section. But check monetary limits given under it.

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CA shanky pahoja (accountant) (615 Points)
Replied 23 June 2016

as per section 194c of the act, tax need to be deducted on contracts and contracts include work contract where goods is supplied or sold by the customer.

in this case tax is required to be deducted at the rate of 1% or 2% as the case may be only on the amount of contract excluding the amount of goods.if amount of goods is exclusively shown in invoice.

and yes monetry limits of 30000 in single and 75000 in aggregate in a whole year to same person need to be considered.

hope it will help you

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