TDS Deduction on a Bill which includes VAT & ST component
This query is : Resolved
Gaurav Agrawal
(Querist)
01 June 2010
A Client of mine has to pay Rs.43843/- to one of his work contractor, towards one single bill. The bifurcation of the bill is as follows-
Materials Rs.20,000/-
VAT Rs.4,000/-
Labour Charges Rs.18,000/-
Service Tax Rs.1,843/-
The problem is whether
1)I should consider Gross Amount of Rs.43843/- for TDS Limit OR
2)Only Labour service portion of Rs.19843/- is to be considered.
Though i am of the view that point (2) is more appropriate, my client requires some case law or rule on which to base upon this answer.
Thanks
Note- The query pertains only for the LIMIT to be considered for TDS deduction.
Materials Rs.20,000/-
VAT Rs.4,000/-
Labour Charges Rs.18,000/-
Service Tax Rs.1,843/-
The problem is whether
1)I should consider Gross Amount of Rs.43843/- for TDS Limit OR
2)Only Labour service portion of Rs.19843/- is to be considered.
Though i am of the view that point (2) is more appropriate, my client requires some case law or rule on which to base upon this answer.
Thanks
Note- The query pertains only for the LIMIT to be considered for TDS deduction.
CA. B.SRINIVASULU
(Expert)
01 June 2010
Please refer section 194 C explanation which says that if the materials are specifically shown in the Bill and vat is collected on the same tds under 194 c need not be deducted on material content. Therefore in your case only Rs.19843 is subject to tds provisions and since it is less than the limit of Rs.30000 per transaction TDS need not be deducted.
Message likes :
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Deepak Goel
(Expert)
01 June 2010
Agree with Mr. Srinivasulu
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