Tds on catering charges
This query is : Resolved
Siva Kumar G
(Querist)
19 February 2015
A Food supply Contractor supplies food to a factory at a fixed rate of say Rs.50 per food served. The invoice raised to the company by the contractor in a month reads as follows:
No: of meals supplied in the month - 100
Rate per meal - Rs. 50
Total charges (50*100) - Rs.5000
Add: VAT @ 2% (5000*2%) - Rs.100
Value of Invoice - Rs.5100
Please clarify as to whether TDS u/s 194C would apply in the above case, since Catering Contract is covered in 194C but no service portion is mentioned in Invoice??
No: of meals supplied in the month - 100
Rate per meal - Rs. 50
Total charges (50*100) - Rs.5000
Add: VAT @ 2% (5000*2%) - Rs.100
Value of Invoice - Rs.5100
Please clarify as to whether TDS u/s 194C would apply in the above case, since Catering Contract is covered in 194C but no service portion is mentioned in Invoice??
19 February 2015
whether service portion is mentioned or not is not relevant for tds u/s 194C but if the annual charges of meal exceeds the threshold limit u/s 194C then tds is applicable in this case.
19 February 2015
TDS provision not applicable on supply of food. It is simply a contract for sale of food.
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19 February 2015
Yes sanjay ji correct vat is applicable and hence no tds will be applicable in this case.error is regretted.
Siva Kumar G
(Querist)
19 February 2015
Thank you experts..
My doubts arose because if you go through the provisions of Section 194C, it doesn't seem to differentiate between the sale of food and catering.
But as per Service Tax,
“Caterer” means any person who supplies, either directly or indirectly, any food,
edible preparations, alcoholic or non-alcoholic beverages or crockery and similar articles or
accoutrements for any purpose or occasion.
I quote 194C,
"Where any sum is paid or credited for carrying out any work mentioned in sub-clause (e) of clause (iv) of the Explanation, tax shall be deducted at source—
(i) on the invoice value excluding the value of material, if such value is mentioned separately in the invoice; or
(ii) on the whole of the invoice value, if the value of material is not mentioned separately in the invoice."
whereas Catering is covered under sub-clause (d) of clause (iv) and such a distinction is not made for this??
My doubts arose because if you go through the provisions of Section 194C, it doesn't seem to differentiate between the sale of food and catering.
But as per Service Tax,
“Caterer” means any person who supplies, either directly or indirectly, any food,
edible preparations, alcoholic or non-alcoholic beverages or crockery and similar articles or
accoutrements for any purpose or occasion.
I quote 194C,
"Where any sum is paid or credited for carrying out any work mentioned in sub-clause (e) of clause (iv) of the Explanation, tax shall be deducted at source—
(i) on the invoice value excluding the value of material, if such value is mentioned separately in the invoice; or
(ii) on the whole of the invoice value, if the value of material is not mentioned separately in the invoice."
whereas Catering is covered under sub-clause (d) of clause (iv) and such a distinction is not made for this??
Rupesh Jain
(Expert)
20 February 2015
its better to deduct the tds due to in this bill food & serving amount both include.
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