I have received the answer of following Query is YEs we have to deduct tds, but our CA not convince, Can you provide me Same case law for the query, which will help me lot.
Are we liable to deduct tds on supply the follwoing Service :
1. Morning & evening Tea given to workers & staff member by Tea stall monthly bill around Rs.50000/- 2. Tiffin Lunch supply by party to our factory for staff & workers. Supplier not registered under service tax or vat. so he not charge any tax on his bill. Monthly bill around Rs.135000/-
Pls advise that is we liable to deduct tds on these type of service.
27 September 2007
Individual bills exceeding Rs.20,000 and combination of bills in a year exceeds Rs.50,000 /- TDS will attract - Sec 194 C of the Income Tax Act.
In your case TDS will attract for both the payments.
Other wise the entire expenditure will be disallowed.
27 September 2007
under sec.194 c. when the recipient is individual or huf or aop and payment(subject to tds) is below rs. ten lakhs TDS @2.06% IS DEDUCTIBLE (CONTRACTOR) IF IT IS A SUB CONTRACTOR TDS@1.03% IS TO BE DEDUCTED. WHEN PAYMENTS EXCEED RS. TEN LAKHS A 10%SURCHARGE IS ADDED TO THE TAX BEFORE CHARGING 3% ED CESS I BELIEVE YOUR ORGANISATION MUST BE REASONABLY BIG ENOUGH AS STAFF AND WORKERS LUNCH AND TEA IS ARRANGED .
YOU MIGHT HAVE ENTERED INTO A CONTRACT ABOUT THE PAYMENTS,OTHER TERMS AND MENU OF SUPPLY,TIMINGS, PENALTIES FOR BREACH ETC....IF NOT PL. DO IT AND ALSO STIPULATE THAT ALL APPLICABLE TAXES WILL BE DEDUCTED. YOU MAY NOT ATTRACT FBT.PERHAPS THIS IS WHAT YOUR C.A MIGHT HAE FELT. AS A REGISTERED SERVICE PROVIDER(ANNUAL EXEMPTION LIMIT BEING RS.8 LAKHS) YOUR CONTRACTOR MAY LEVY SERVICE TAX IN HIS BILLS ON YOUR ORGANISATION AND IN THAT CASE YOU NEED TO DEDUCT TDS AFTER ADDING SERVICE TAX AMOUNT ALSO TO THE BILL AMOUNT. C.A.R.V.RAO
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