Tds on service bill
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
08 April 2013
we are a company purchasing machines from another company for resale for this machines we are receiving service expense bill from the selling company they have no service tax registeration
my question is that whether we need to deduct TDS on this service expense bill ,if yes under what heat 194C OR 194J
my question is that whether we need to deduct TDS on this service expense bill ,if yes under what heat 194C OR 194J
08 April 2013
what kind of service expenses bill you are receiving from the seller company ??
27 July 2025
Here’s the clarification on **TDS on service bill related to purchase of machines for resale**:
---
### Situation:
* Your company is buying machines from another company for resale.
* The selling company is issuing a **service expense bill** (not a sale invoice).
* The selling company **does not have Service Tax registration**.
* You want to know if TDS should be deducted on this service bill.
* Also, under which section: **194C** (Contractor) or **194J** (Professional/Technical Services).
---
### Key points:
1. **Nature of Payment Matters**:
* If the payment is **for supply of goods only**, TDS is generally **not applicable**.
* If the payment is for **services**, then TDS provisions apply.
2. **Purchase of Machines for Resale**:
* This is usually a **sale of goods**, not a service.
* If the "service expense bill" is actually a bill for sale of goods, then **no TDS** is required.
* If it’s genuinely for services like installation, testing, commissioning, etc., then TDS may apply.
3. **Service Tax Registration Not There**:
* Lack of service tax registration means the seller may not be a service provider under the Service Tax law, but that does **not** exempt TDS deduction under the Income Tax Act.
4. **Which Section to Deduct TDS?**
* **Section 194C (Contractor):**
Applies to payments to contractors/sub-contractors for carrying out any work including supply of labor for carrying out any work.
* **Section 194J (Professional or Technical Services):**
Applies to fees for professional services, technical services, royalty, or non-compete fees.
5. **Applicability in your case:**
* If the bill is for **installation, commissioning, repair, maintenance, or other services** related to machines, **TDS under 194C or 194J** applies depending on the nature of service:
* For **contractual works** including installation, testing: **194C**
* For **professional/technical services** like consultancy, technical advice: **194J**
* If the bill is **only for sale of machines**, **no TDS** is deductible.
---
### Summary:
| Scenario | TDS Deduction Required? | Section Applicable |
| -------------------------------------- | ----------------------------------------------- | ------------------ |
| Sale of machines (goods only) | No | N/A |
| Installation/commissioning work | Yes | 194C |
| Technical/Professional services | Yes | 194J |
| Seller has no service tax registration | TDS still applicable if payment is for services | 194C / 194J |
---
### Suggestion:
* Clarify the nature of the bill: is it sale of goods or service?
* If it’s service, decide section based on service type.
* Deduct TDS accordingly on the service amount (excluding any tax components if applicable).
---
If you want, I can help you draft the TDS calculation or clarify how to classify the service further!
---
### Situation:
* Your company is buying machines from another company for resale.
* The selling company is issuing a **service expense bill** (not a sale invoice).
* The selling company **does not have Service Tax registration**.
* You want to know if TDS should be deducted on this service bill.
* Also, under which section: **194C** (Contractor) or **194J** (Professional/Technical Services).
---
### Key points:
1. **Nature of Payment Matters**:
* If the payment is **for supply of goods only**, TDS is generally **not applicable**.
* If the payment is for **services**, then TDS provisions apply.
2. **Purchase of Machines for Resale**:
* This is usually a **sale of goods**, not a service.
* If the "service expense bill" is actually a bill for sale of goods, then **no TDS** is required.
* If it’s genuinely for services like installation, testing, commissioning, etc., then TDS may apply.
3. **Service Tax Registration Not There**:
* Lack of service tax registration means the seller may not be a service provider under the Service Tax law, but that does **not** exempt TDS deduction under the Income Tax Act.
4. **Which Section to Deduct TDS?**
* **Section 194C (Contractor):**
Applies to payments to contractors/sub-contractors for carrying out any work including supply of labor for carrying out any work.
* **Section 194J (Professional or Technical Services):**
Applies to fees for professional services, technical services, royalty, or non-compete fees.
5. **Applicability in your case:**
* If the bill is for **installation, commissioning, repair, maintenance, or other services** related to machines, **TDS under 194C or 194J** applies depending on the nature of service:
* For **contractual works** including installation, testing: **194C**
* For **professional/technical services** like consultancy, technical advice: **194J**
* If the bill is **only for sale of machines**, **no TDS** is deductible.
---
### Summary:
| Scenario | TDS Deduction Required? | Section Applicable |
| -------------------------------------- | ----------------------------------------------- | ------------------ |
| Sale of machines (goods only) | No | N/A |
| Installation/commissioning work | Yes | 194C |
| Technical/Professional services | Yes | 194J |
| Seller has no service tax registration | TDS still applicable if payment is for services | 194C / 194J |
---
### Suggestion:
* Clarify the nature of the bill: is it sale of goods or service?
* If it’s service, decide section based on service type.
* Deduct TDS accordingly on the service amount (excluding any tax components if applicable).
---
If you want, I can help you draft the TDS calculation or clarify how to classify the service further!
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