Tds

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

27 December 2011 in a company a vender provide the breck fast,scaks, and raised the bills, my query is should we have to deduct the TDS

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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27 December 2011 yes. its contract u/s.194C

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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27 December 2011 In my view TDS not attracted as it is nothing but sell off food. So TDS not required to be deducted. Whats your take on this, Ramesh Ji?

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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27 December 2011 Thanks Sanjay Ji. In the given case the supply of breakfast (Food) I am taking in 2 views

1. If the vendor selling the food directly to the employees collecting amount from them, no contract exist in between company and vendor -such as case no tds apply

2. Here the case is Vendor raising the bill to the Company, there will be the element of contract exist between company and vendor, this may called catering services, so TDS will apply. for this i unable to provide any legal supporting but As per the circular no.785 dt:8.8.1995. CBDT clarified that TDS not applicable when the caterer payment is made for serving food in a restaurant in the normal course of running of the restaurant/cafe.

So in the above circular giving exception for catering service only on restaurants.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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27 December 2011 Thanks Ramesh Ji for giving your views.

But in my view it is simply supply of food i.e. sale of food and therefore no TDS shall be deducted. Also no service being rendered just the supply of foods.

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