TDS on consumer Contribution
This query is : Resolved
19 May 2008
The Company is a Electricity Distribution Company (herein after referred to as “EDC”). It provides supply of Power to various categories of consumers.
In the course of the business, the EDC collects contribution from consumers for laying lines and transformers to the premises of the consumer for providing continuous supply of power to the consumers.
The EDC treats the contribution so received as capital and deducts the same from the cost of fixed assets.
The issue is that one Consumer-Company (herein after referred to as “CC”) wants to deduct TDS from the payment made to EDC towards such contribution treating the same as work contract
My question is “Whether the above payments are covered by any TDS provisions and the CC is liable to deduct TDS on such type of payments”. If so under which section it is covered under the Income Tax.
In the course of the business, the EDC collects contribution from consumers for laying lines and transformers to the premises of the consumer for providing continuous supply of power to the consumers.
The EDC treats the contribution so received as capital and deducts the same from the cost of fixed assets.
The issue is that one Consumer-Company (herein after referred to as “CC”) wants to deduct TDS from the payment made to EDC towards such contribution treating the same as work contract
My question is “Whether the above payments are covered by any TDS provisions and the CC is liable to deduct TDS on such type of payments”. If so under which section it is covered under the Income Tax.
CA. Yayati Tyagi
(Expert)
21 May 2008
in my opinion tds is applicable as it amounts to work contract. it should be covered u/s 194C.
24 May 2008
The Consumer Company is making payment to you for a performance of Contract & hence liable for T.D.S u/s 194C.
the Treatment of Such Receipt in your books of account has no relevance with the liablilty of payee company in matter of T.D.S.
the Treatment of Such Receipt in your books of account has no relevance with the liablilty of payee company in matter of T.D.S.
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