Section 194c

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SUSHIL GUPTA (Querist)

14 February 2018 Dear Experts

We are manufacturer of condenser used in refrigerator and manufacture wire in house that is used in condenser.
For wire manufacturing we purchase MS rod, because of not having capacity to full fill demand of production dept. we also purchase wire from outside suppliers, one of the outsider supplier purchasing rod from us and selling wire to us that was produced from the rod purchased from us.

Now my query is that, is this scenario covered in under section 194 C ?

Should we deduct TDS on the payment to supplier for purchasing wire under section 194C?

Pls suggest.

Thanks
Sushil Gupta

Anand

Anand (Expert)

14 February 2018 Section 194C requires TDS to be deducted by any person responsible for paying any sum to a resident for carrying out any work in pursuance of a contract. The term "work" is defined to include, inter alia, manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from the customer. In your case, i quote "one of the outsider supplier purchasing rod from us and selling wire to us that was produced from the rod purchased from us."
This is squarely covered by the definition of work and hence TDS is deductible on this transaction.

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)

14 February 2018 TDS not applicable Both amounts to purchase, Do question of Job Work not arise 194C not applicable

RAJA P M

RAJA P M (Expert)

14 February 2018 TDS not applicable in this Transaction. Here only Buying & Selling process is going. No more Labour works or Contract works... So, No way for applicable sec 194C and No need deduct TDS...

Anand

Anand (Expert)

15 February 2018 the case described by Mr Gupta, in my opinion, is getting covered by the definition of work which specifically describes such a situation. so in light of that can my fellow experts clarify how they are saying this transaction is not liable to TDS under 194C

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