Tds on material and labour (Consolidated Bill) U/S194C

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This discussion clarifies the rules for Tax Deducted at Source (TDS) on consolidated bills that combine material and labour charges under Section 194C. If the bill cannot be split into material and labour components, TDS is applicable to the entire amount (excluding GST) once the threshold limit is exceeded. Even if labour details are shown separately on a consolidated invoice, TDS is generally deducted on the total bill amount, excluding GST, as separating the components for accounting purposes doesn't always alter the TDS applicability.

JIGNESH KRISHNAKANT KAPADIA

JIGNESH KRISHNAKANT KAPADIA (Querist)
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29 February 2020 Sir / Madam,

Pls. let me know about tds implication in case where consolidated bill is received for material and labour. And no seperation can be made. whether it is subject to tds in case where it exceeds thresold limit u/s194C. So tds will be applicable on entire amount of consolidated bill.

Jignesh Kapadia

CA Akshay Jangid

CA Akshay Jangid (Expert)
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29 February 2020 In case of consolidated bill if it is possible to categorise the amount as pertaining to labour and material, then TDS will be dedcuted only on the amount of labour charges at applicable rates u/s 194C and no TDS will be deducted on the amount of Material charges.
Since in your case it is not possible to categorise between labour and material charges TDS will be deducted on the entire bill amount(excluding GST)

JIGNESH KRISHNAKANT KAPADIA

JIGNESH KRISHNAKANT KAPADIA (Querist)
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29 February 2020 When i am getting consolidated bill with Labour details shown seperately. In that case i am suppose to deduct on entire amount of bill of material + labour (excluding GST). How can i divide material and labour under same invoice no. Moreover, while passing entry in books of a/cs, i have to use two separate books, once for purchase of material and other for Labour / Job work.