12 December 2010
We have released a Work order to a vendor for supplying material for maintenance work of a machinery, say the material value is Rs. 200000. In the same order, we ordered for servicing of the machinery for which the cost comes around Rs. 50000/-. The vendor is charging VAT on supply part and Service tax on Service portion. Can anyone explain whether TDS is applicable on total invoice value or only on service portion?
12 December 2010
If the works contractor purchased the materials worth Rs.2,00,000/-from open market (not from you),the activity referred in the query will not come under the definition of "work" as per the substituted section 194C w.e.f 1/10/2009 meaning thereby TDS provisons will not attract thereon.