Tds on packed lunch purchase

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samscool (Querist)
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19 February 2013 Dear Sir/Madam,

Our Company has purchased some 300 packed lunch @ 900 + 12.5% vat on it cost rs.303750/-

So my question is this, is tds applicable on this or not.

& is this service comes under catering or not

Please advise

Regards.......... Shekhar Arya

Nikhil Kaushik

Nikhil Kaushik (Expert)
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19 February 2013 If there is a bill showing 300 lunch packs with cost per pack + VAT, there is no need to deduct TDS.

Whether the said activity falls under catering service or not is not the buyer's lookout.

CA Parul Saxena

CA Parul Saxena (Expert)
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19 February 2013 Yes TDS applicable under section 194C

Nikhil Kaushik

Nikhil Kaushik (Expert)
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19 February 2013 With Due respect to Ma'am Parul's view. The company purchasing 300 packets from a vendor doesn't automatically make it a catering transaction.

Unless and until there is evidence to show that the company gave a contract for catering of lunch for 900 persons, I don't see 194C getting invoked.

CA Parul Saxena

CA Parul Saxena (Expert)
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19 February 2013 For the purpose of attracting sec.194C it is not compulsory that contract must be in written form. It can be oral also. So any work done the limit of which crosses the basic exemption given under sec.194C is liable to deduct TDS under this section.

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Nikhil Kaushik

Nikhil Kaushik (Expert)
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19 February 2013 I don't think purchasing something off-shelf or from a sweet shop for that matter makes it a contract.

There should been work done pursuant to the contract. In this case, it a matter of supply of material.

However, in case the company may have hired a caterer to arrange the catering services for food, 194C would have triggered.

So according to me, TDS wont apply. it would be great if any settled case law can be shared to substantiate other possible views.

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