TDS on Payment - Clarification
This query is : Resolved
Subramanian D
(Querist)
17 July 2024
Solar project we executed with PMC last year. PMC submitted six invoices, of which two pertained to services accompanied by machinery/equipment/modules. We capitalized these services as an integral part of the asset, as they were essential for the project's completion.
During payment, we deducted TDS under Section 194Q, considering the invoices as assets. However, PMC is now disputing our approach, claiming that we should have deducted TDS under Section 194C for the service invoices, as they consider them as services. We maintain that these services are an integral part of the asset and, therefore, not subject to TDS under Section 194C.
Could any one kindly provide clarification on the correct approach in this situation and confirm whether our stance is correct?
Thank you for your time and expertise.
During payment, we deducted TDS under Section 194Q, considering the invoices as assets. However, PMC is now disputing our approach, claiming that we should have deducted TDS under Section 194C for the service invoices, as they consider them as services. We maintain that these services are an integral part of the asset and, therefore, not subject to TDS under Section 194C.
Could any one kindly provide clarification on the correct approach in this situation and confirm whether our stance is correct?
Thank you for your time and expertise.
CA R SEETHARAMAN
(Expert)
18 July 2024
194C TDS applicable on service provided.
Separate TDS applicable on services no need to combine.
Separate TDS applicable on services no need to combine.
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