Tds on free service coupons

This query is : Resolved

RAJIV (Querist)
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22 October 2012 Our company is in manufacturing of two wheelers. As a normal practice company provides free servicing to customer through our dealers. Earlier we were not deducting any TDS. Now we have received opinion from some consultant that TDS is required. Please clarify on below-
1. Whether TDS is required and under which head?
2. Should we pay TDS out of pocket for previous year free service coupon expenses.
3. Can there be penalty proceedings against us even if we pay TDS+Interest.

Kindly clarify here or mail me at mehndiratta.rajiv@suzukimotorcycle.in

Amol S Joglekar

Amol S Joglekar (Expert)
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22 October 2012 Basically , you are a manufacturer. Free service comes as promotional efforts by the company. Sale price of vehicle is INR20,000 average and 1 free service is worth INR500. The ratio is in favour of promotional activity. No TDS be deducted. Case should be CORRECTLY and with its TRUE intent be pleaded with the consultant.

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