Tds deduction

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Querist : Anonymous

Querist : Anonymous (Querist)

13 June 2014 Sir,
We are purchasing cash vouchers from a party where he will print our company name on the paper and delivery to us. in his bill there will be no vat and service tax. It is like composite contract where paper is material and printing is labour. Now the question is TDS applicability. If applicable on what amount we have to deduct. In his bill he wont give amount for labour and material. simply he will give total amount. monthly overall bill amount is Rs.35000/-.

Sandeep Dharar

Sandeep Dharar (Expert)
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13 June 2014 Since U r purchasing the documents from him, and not provided papers, inks or labours to complete ur work, hence no contract is formed between u and the Press. So no TDS will b applicable.

If u provide papers and ask him to print vouchers, then it will b treated as works contract, and in that case TDS & VAT both will b applicable.

Querist : Anonymous

Querist : Anonymous (Querist)

13 June 2014 Sir,
We made contract with him for suply of folders for which contractor has to print on the paper such as my company name, sl.no, date, customer name and so on (here he is doing some labour work). What is the tds applicability?

Sandeep Dharar

Sandeep Dharar (Expert)
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13 June 2014 Look dear if contract is formed between u n the press then TDS will b attracted u/s 194C Contractor or Sub Contractor.

The limit is:-

30K - Single Bill
75K - Annually

Rate:-
Ind/HUF - 1%
Others - 2%.

Querist : Anonymous

Querist : Anonymous (Querist)

13 June 2014 Sir,
my doubt is on what amount We have to deduct TDS since his bill include both material and labour but he will not give brakeup . As per service tax rules some proportion will be treated as labour and on that amount tds will be deducted . but i dont know the proportion .

Sandeep Dharar

Sandeep Dharar (Expert)
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13 June 2014 TDS Will b exclusive of Service Tax. U must have to deduct on the payment to him exclusive of ST.

Explanation:-

Like the Net bill he charged on u is of Rs. 50000(say) inclusive of ST. So u must exclude ST Figure of 5500 (say) and should charge TDS on 44500 and pay the balance amount (after deduction of TDS).

Querist : Anonymous

Querist : Anonymous (Querist)

13 June 2014 but in his bill there will be no service tax and bill amount include both labour and material for which there will be no brake up. basically tds to be deducted on labour portion only but in his bill there will no labour portion. we can deduct tds on full bill amount(which consist of material and labour)?

Sandeep Dharar

Sandeep Dharar (Expert)
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13 June 2014 Yes dear that same thing is explained above. Read carefully and with cool mind.

Convey ur thanks by hitting the thanks button.

Querist : Anonymous

Querist : Anonymous (Querist)

13 June 2014 Sir,
finally if one of the bill amount is Rs.25000/-(which consist both material and labour with out brake up), then i can deduct tds on full amount of Rs.25000/-. is it correct or not sir ?

Sandeep Dharar

Sandeep Dharar (Expert)
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13 June 2014 Dear, first set ur mind regarding TDS. Otherwise u can't clear confusions. Does that amount satisfies the limit prescribed u/s 194C?

Querist : Anonymous

Querist : Anonymous (Querist)

13 June 2014 Sir,
limit already crossed in earlier bills. then replay for previous questions sir?

Querist : Anonymous

Querist : Anonymous (Querist)

13 June 2014 sir replay, please for the above question.

Sandeep Dharar

Sandeep Dharar (Expert)
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13 June 2014 U R required to read the section in detail:-

Visit the following link:

http://www.simpletaxindia.net/2009/11/tds-on-job-work-us-194c-amended-from.html

Message likes : 1 times

Querist : Anonymous

Querist : Anonymous (Querist)

14 June 2014 Sir,
In the above question . if the contracter billed with service tax. Material is not given by contractee. then tds will applicable or not?

Querist : Anonymous

Querist : Anonymous (Querist)

14 June 2014 replay please sir

Asha Kanta Sharma online

Asha Kanta Sharma online

(Expert)
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27 July 2025 Here’s the clear answer to your query about TDS deduction on bills which include both material and labor but without breakup:

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### Facts:

* You are purchasing printed folders (paper + printing labor) from a contractor.
* The bill amount includes both material and labor but no breakup is provided.
* The bill **does NOT include service tax**.
* You want to know on what amount TDS should be deducted under **Section 194C**.

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### Relevant points:

1. **TDS under Section 194C applies only on the labor portion (i.e., contract work), not on the material portion.**

2. When the bill does not provide a breakup between labor and material, **the entire amount is considered for TDS deduction** as per general practice and to avoid disputes.

3. The Income Tax Department and courts have often taken the view that in case of composite bills without breakup, TDS is to be deducted on the **full amount**.

4. If the contract is a works contract (which printing and supplying folders with company name qualifies as), the payer **must deduct TDS on the entire amount** payable.

5. The absence of service tax or VAT does not change the applicability of TDS.

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### Conclusion:

* Since there is no breakup, **you should deduct TDS on the full bill amount**, e.g., Rs. 25,000, irrespective of the material and labor portion.

* The applicable TDS rate is:

* **1%** if the payee is an Individual or HUF,
* **2%** in other cases.

* Ensure that the cumulative payments cross the threshold limit (Rs. 30,000 per single bill or Rs. 75,000 per annum) for TDS applicability.

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### Additional advice:

* Request your vendor to provide breakup for future bills for better clarity.

* Maintain proper documentation explaining your basis for deduction in case of scrutiny.

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If you want, I can help draft a note or communication for your records on this. Would you like that?

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