Nikhil Pokharna (CHARTERED ACCOUNTANT) (9 Points)
24 September 2018Hi Sir,
Our Company Say ABC Ltd has given an order for gift frame to another company.
In PO it is mentioned that logo of the company ABC Ltd. should there on the frame.
Total No. of frames 1450 Total Taxable Value 4,71,250/-
Do ABC Ltd required to deduct TDS on this. (Frames are not provided by ABC Ltd and no seperate price mentioned in the invoice of material and services)
or we can consider it as a supply?
A B Kundu
(Professional)
(1422 Points)
Replied 24 September 2018
Are you talking about TDS for the purpose of Income Tax or GST??
For the purpose of Income Tax, yes TDS to be deducted under Sec.194C @ 2%.
For the purpose of GST, yes it is a supply. But according to me TDS provision is applicable from 1st October'18 and it is applicable only on the CG, SG, Other Governmental Entity, Any other body which has been set up under the act of parliament or state legislature etc.
Nikhil Pokharna
(CHARTERED ACCOUNTANT)
(9 Points)
Replied 25 September 2018
Thank you sir for your reply.
As per Section 194C (3) and refering the explanation (iv) (e) which says about defination of work as follows
In explaination (iv)
(e) manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from such customer, but does not include manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from a person, other than such customer.
As per above TDS should is not applicable because our Comapny has neither sold nor supplied frames to the vendor. But to be called it a work law requires that product should be supplied by the ABC Ltd.
Please clarify sir.
Thank you
Nikhil pokharna
A B Kundu
(Professional)
(1422 Points)
Replied 25 September 2018
| Originally posted by : Nikhil Pokharna | ||
 |
Thank you sir for your reply. As per Section 194C (3) and refering the explanation (iv) (e) which says about defination of work as follows In explaination (iv) (e) manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from such customer, but does not include manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from a person, other than such customer. As per above TDS should is not applicable because our Comapny has neither sold nor supplied frames to the vendor. But to be called it a work law requires that product should be supplied by the ABC Ltd. Please clarify sir. Thank you Nikhil pokharna |
 |
Yes, you are right. In that case it would be treated as Contract for Sale, hence no TDS would be applicable.
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