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Tds on labour contractors 194c

IamJay (Student CA IPC / IPCC) (32 Points)

19 November 2015

basic valuse of bill is 3,00,009/-

VAT charged @ 8% i.e. 24,000/-

Service Tax charges on abeted value i.e 1,20,004(40% of 3,00,009/-)

how much TDS should be deducted?

only on Rs. 1,20,004/- ?

Contractor have shown in the bill total value of materials used

60% abatement on contractors bill is correct?

Please help me

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17 Replies

vishnu bhardwaj (Tax Advocate) (212 Points)
Replied 19 November 2015

Tds is deducted on service part only. and tds not deducted on service tax

IamJay (Student CA IPC / IPCC) (32 Points)
Replied 19 November 2015

thank you sir

Karthik.V.Kulkarni (Chartered Accountant) (594 Points)
Replied 19 November 2015

Tds should be dedcted on whole value of invoice. Tds is not limited to the amount you consider for service tax.

IamJay (Student CA IPC / IPCC) (32 Points)
Replied 19 November 2015

I think Mr.Vishnu is right as total value of materials used is mentioned in the invoice. So TDS should be deducted on service portion only.

CA JINAL SHAH (IN PRACTICE) (165 Points)
Replied 19 November 2015

TDS will be deducted on material portion.If there is bifuracation of Material and service in invoice than TDS should be deducted on Service amount. TDS to be charge excluding service tax.

chhaganlal (Student) (46 Points)
Replied 19 November 2015

As per case of Rajasthan urban development limited TDS deduction Excluding of service tax whole of amount with material

chhaganlal (Student) (46 Points)
Replied 19 November 2015

As per case of Rajasthan urban development limited TDS deduction Excluding of service tax whole of amount with material

Jayakrishna (Student) (132 Points)
Replied 19 November 2015

By excluding service part..

Karthik.V.Kulkarni (Chartered Accountant) (594 Points)
Replied 20 November 2015

I would like reiterate the fact that there is no exclusion of materials involved, except only in case of manuf or supply of product using the materials of the payer as per the specification of payer if shown seperately in invoice. I would have to differ with my esteemed collegues who have advised otherwise.

IamJay (Student CA IPC / IPCC) (32 Points)
Replied 20 November 2015

@ Mr. Karthik ~ you mean TDS to be deducted on Basic + VAT i.e. on Rs.3,24,009/- in this case?

Karthik.V.Kulkarni (Chartered Accountant) (594 Points)
Replied 20 November 2015

If terms of contract provide for seperate payment of service tax the same is to be excluded as per not no 1/2014 and as per high court decision on rajisthan urban development case law. It would be equally appicable where the person is acting as just a collecting agency on behalf of govt. Though i believe the said judgement can be equally appilcable in case of vat or any indirect taxes since there are no specfic notifications in this regards and to avoid harrassment by tax department i would suggest you go ahead with tds on vat portion as well.

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