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Querist : Anonymous

Querist : Anonymous (Querist)

23 May 2012 if we purchase woven carry bag printed co. name than we deduct the tds to vendor.

we are retail co.

CA. Hari Kishan

CA. Hari Kishan (Expert)
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23 May 2012 Sec 194C is clear on this matter that where it is pure job work.. TDS shall attract. Incase the material is sold to the customer charging VAT, no TDS shall be applicable as it shall be sale of goods.

CA. Hari Kishan

CA. Hari Kishan (Expert)
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Querist : Anonymous

Querist : Anonymous (Querist)

26 May 2012 can you clear that is that job work .

Q. we purchase carry bag with printed our co. name on that bag. so is that job work if yes than explain.

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)
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27 July 2025 The situation you've described relates to whether **TDS (Tax Deducted at Source)** is applicable under **Section 194C** of the Income Tax Act, 1961, for the purchase of **carry bags printed with your company’s name**.

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### 🔍 Key Facts:

* You are a **retail company**.
* You are purchasing **woven carry bags** that have **your company’s name printed** on them.
* The vendor supplies you with **finished carry bags**, possibly charging **VAT (or now GST)**.

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### ✅ When is TDS under Section 194C Applicable?

**Section 194C** applies to **"works contracts"** — meaning if you're getting something made as per your specifications (job work), **TDS must be deducted**.

But there's a key **distinction** made by courts and CBDT circulars:

#### 1. **If it is a “contract for sale”**:

* Supplier uses their own material.
* Sells you a product (e.g., carry bags) with **VAT/GST charged**.
* Then **it is a sale**, not a job work. **No TDS under 194C**.

#### 2. **If it is a “contract for work”** (Job Work):

* You supply the material (e.g., plastic, paper, etc.).
* Vendor only does the work (e.g., printing, stitching).
* Or, vendor charges for making goods to your specification using your materials or partially yours.
* Then **TDS is applicable under Section 194C**.

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### 🧾 So in your Case:

#### If:

* Vendor **uses their own material** to make carry bags,
* Prints your company name,
* **Raises a tax invoice with VAT/GST**,
➡️ **This is considered a sale**. **No TDS** under Section 194C.

#### But If:

* You provide the carry bags,
* Vendor **only prints your name** on them as per your instruction,
* Charges a fee for printing (not a sale),
➡️ Then it is **job work**. **TDS under Section 194C is applicable**.

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### 🧑‍⚖️ Supporting Case Laws / Circulars:

* **CBDT Circular No. 13/2006**: If the supplier supplies a product as per specifications by using their **own material**, it is a **contract for sale**, not a works contract.
* **Supreme Court ruling** in **Associated Cement Co. Ltd. vs. CIT (1993)** and later interpretations.

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### ✅ Conclusion:

In your case, if you're **buying finished carry bags printed with your company name and vendor is charging VAT/GST**, it is **not job work**. It is a **sale**.
👉 **TDS is *not* deductible under Section 194C.**

Let me know if you'd like a sample invoice analysis to be sure.

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