TDS APPLICABILITY
This query is : Resolved
02 March 2021
we gave order to someone to print stickers of our product name( say GIDPC), materials are theirs.
will TDS apply under section 194c
will TDS apply under section 194c
Ganeshbabu K
(Expert)
02 March 2021
1)TDS under section 194C is not applicable on printing material as per customer specification, wherein customer has not supplied any material to contractor & contractor has supplied the final product for a price, which is in the nature of contract for sale.
2)In your case contractor purchases the material on his own and applies his labour on such material purchased& Further, the contractor is transferring the title in goods to customer and hence it is outside the purview of section 194C.
Reference : Circular No.13/2006 dated 13.12.2006
Before taking a decision on the applicability of TDS under section 194C on a contract, it would have to be examined whether the contract in question is a ‘contract for work’ or a ‘contract for sale’ and TDS shall be applicable only where it is a ‘contract for work’.
2)In your case contractor purchases the material on his own and applies his labour on such material purchased& Further, the contractor is transferring the title in goods to customer and hence it is outside the purview of section 194C.
Reference : Circular No.13/2006 dated 13.12.2006
Before taking a decision on the applicability of TDS under section 194C on a contract, it would have to be examined whether the contract in question is a ‘contract for work’ or a ‘contract for sale’ and TDS shall be applicable only where it is a ‘contract for work’.
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