TDS on Medcine purchase
This query is : Resolved
07 March 2009
Whether TDS is applicable on Medcine purchase by Distt Health Socitey for free distribution in Govt Hospital u/s 194C.
CA Tilak Raj Sharma
(Expert)
07 March 2009
If there is agreement with a specific agency for the purchase. If the medicines are purchased from open market and no contract/agreement, then there will be no need to deduct TDS.
08 March 2009
Thanks u Sir,
But in Sec 194 C TDS is applicable on supply of Labour and there is no other reference of purchase or supply material?
But in Sec 194 C TDS is applicable on supply of Labour and there is no other reference of purchase or supply material?
27 July 2025
Exactly! You’re on point.
**Section 194C** deals with **payments to contractors or subcontractors for work done** — mainly **labor or services**. It **does not apply to mere purchase or supply of goods/materials** like medicines.
So,
* If the District Health Society **purchases medicines directly from the market** (no contract for “work” but just buying goods), **no TDS under section 194C**.
* If there is a **contract with an agency** that includes supply + service (like distribution or handling), TDS under 194C might apply on the service part.
In short: **TDS is not applicable on pure purchase of medicines** under 194C.
**Section 194C** deals with **payments to contractors or subcontractors for work done** — mainly **labor or services**. It **does not apply to mere purchase or supply of goods/materials** like medicines.
So,
* If the District Health Society **purchases medicines directly from the market** (no contract for “work” but just buying goods), **no TDS under section 194C**.
* If there is a **contract with an agency** that includes supply + service (like distribution or handling), TDS under 194C might apply on the service part.
In short: **TDS is not applicable on pure purchase of medicines** under 194C.
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