Professional Services

This query is : Resolved

SHIVARAJA. RAI. G.P. (Querist)
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11 August 2010 Hi,

Could you please clarify my doubts on the below:-

We are having a contract with one of the Human Resource Consultants. The service they are providing is:
1) Providing candidates to fill the vacnacies in our organisation. Again the recruited candidates will be on our organisation's role.
2) Supply of manpower for the organisation requirements (with out any major skill sets, e.g Diploma holders). The candidates will be on contract basis.
The service provider has given certificate for lower deduction of TDS @ 1.5%. stating the service as professional service.

Now, my question is whether the above both services will fall under Professional service or can we treat the 2nd service as contract by deducting TDS @ 2%.

Please clear my doubts on the above.....

CA SMR

CA SMR (Expert)
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11 August 2010 In my opinion this is professional service.

CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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11 August 2010 In both the cases, employed persons are of your organisation , the forms are only different like one is direct & the other is on contract.

More appropriate treatment would be "Professional services under section 194 J"

Had this been a clear case of "Labour Contractor" then section 194 C would have applied.

But in your case, Professional services would be more appropriate head.

SHIVARAJA. RAI. G.P.

SHIVARAJA. RAI. G.P. (Querist)
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14 August 2010 Thanks alot!

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