TDS

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FORAM PARMAR (Querist)
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04 February 2020 Under GST supply of solar system is considered as works contract and 70% of Value of total contract will be considered as supply of goods having tax rate of 5% and rest 30% of total value of contract will be considered as supply of service having tax rate of 18%. Thus, average rate of gst will be 8.90%. ( clarification issued vide notification no. 24/2018 - Central Tax (rate) dated 31.12.2018).

Now, my question is whether TDS U/s. 194C of the Income tax or any other section of Income Tax is applicable on above transaction?

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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04 February 2020 Check the definition of works contract under sec 194C. It will apply here or not needs to be checked accordingly.

FORAM PARMAR

FORAM PARMAR (Querist)
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05 February 2020 Sir, as per sub-clause (e) of clause (iv) of the Explanation to section 194C, "work" shall include ... manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from such customer,
but does not include manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from a person, other than such customer.

In my case material is not supplied by the customer, but it is supplied by the supplier along with installation service only. ( as already mentioned above, value of goods will be 70% of the total contract value). According to me, my case does not fall under the definition of work as it expressly excludes same from the definition of work ("but does not include manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from a person, other than such customer").

Is this stand correct?

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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05 February 2020 but does not include manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from a person, other than such customer").

supplier is not customer or not associated with customer then no tds applicable.

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