Hire charges of plant/machinery and euipment covered by both
This query is : Resolved
Sumeet Agarwal
(Querist)
14 January 2012
As per Explanation to sec 194 I of the Act, Rent include any payment for the use of plant machinery and equipment.Further, With effect from July,2006 scope of 194 J has been extended to include royalty payment. As per explanation 2 to Section 9(1)(vi) , royalty include consideration for the "use or right to use any industrial , commercial or techanical equipment".
Thus, whether hire charges paid in relation to them are covered by Sec 194 I or 194 J?
Thus, whether hire charges paid in relation to them are covered by Sec 194 I or 194 J?
CA PARAS BAFNA
(Expert)
14 January 2012
As I understand,
if any equipment is essential in the industrial unit it may be termed as forming part of Plant & Machinery.
Whereas an independent equipment can not be said as Plant &/or Machine. Because Plant is different from an equipment.
.
Logically on the above ground TDS has to be deducted U/s 194-I only as it applies to Plant, Machinery and equipments, whereas royalty is applicable on " equipments" only.
.
if any equipment is essential in the industrial unit it may be termed as forming part of Plant & Machinery.
Whereas an independent equipment can not be said as Plant &/or Machine. Because Plant is different from an equipment.
.
Logically on the above ground TDS has to be deducted U/s 194-I only as it applies to Plant, Machinery and equipments, whereas royalty is applicable on " equipments" only.
.
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