TDS on job work u/s 194c

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This query is : Resolved

CA Amrish Gupta (Querist)

08 January 2009 If we have a JOB WORK bill from a party which includes material and labour amt sepreately in the same bill.Than at wat amount we should deduct TDS i.e on both on labour and material amount or only on labour amount?

CA. Dashrath Maheshwari

CA. Dashrath Maheshwari (Expert)

08 January 2009 ON TOTAL BILL AMOUNT

CA Rohin Arora

CA Rohin Arora (Expert)

08 January 2009 as per the income tax rules...you have to deduct tds on full amount of invoice even if the same includes labour and material....you cant bifurcate the labour and material part in any invoice....if the invoice contains both then deduct tds @ 2 %+cess as per sec 194 c from the full invoice amount.

i can give you an alternative...just ask the vendor to raise two different invoices...
first for the labour part from which you will deduct the tax amount.
second for the material part for which you pay the full....

this will help.

any help do write to me..

Rohin

CA Amrish Gupta

CA Amrish Gupta (Querist)

08 January 2009 IF IN THE JOB WORK BILL WE CAN BIFUCATE THE LABOUR AMOUNT AND MATERIAL AMT THAN AT WAT AMOUNT WE DEDUCT TDS(ON FULL INVOICE VALUE OR ON LAB PART ONLY)

CA Tilak Raj Sharma

CA Tilak Raj Sharma (Expert)

08 January 2009 When a manufacturer purchases raw material on his own and produces the goods as per the specifications of buyer, it is a case of sale of goods and not job work - Whirlpool of India Ltd. v. CIT (2007) 16 SOT436 (Delhi).

If the ownership in material passes to the buyer only at the time of delivery of goods and prior to that ownership vests with the manufacturer, it will be a transaction of sale and not subject to TDS u/s 194C. - CIT v. Seagram Mfg. (P) Ltd. (2008) 19 SOT139 (Delhi)

CA Tilak Raj Sharma

CA Tilak Raj Sharma (Expert)

08 January 2009 You can take the benefits of two judgements given above.

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