Tds on supply of lunch for workmen
This query is : Resolved
12 September 2013
A company orders food for their workmen.The supplier provides food to the workmen based on the orders placed by the company on a daily basis.Payment is around Rs.40000(approx) and it is made on a monthly basis.The supplier is an individual.Please advice the applicability of tds & if applicable state the respective provision in law
12 September 2013
TDS not applicable on Supply of Foods alone.
13 September 2013
thanx.But can u explain me with respect to related provisions.
27 July 2025
Sure! Here’s the detailed explanation regarding **TDS on supply of lunch/food to workmen**:
---
### Applicability of TDS on Supply of Food to Workmen
**1. Nature of Payment:**
* The company is paying an individual supplier for **providing food (lunch) to workmen** based on orders placed.
* This is a **sale/supply of goods (food)** and **not a contract for services** like catering or supply with service element.
* The payment is for **supply of food alone** and not for any other service like labour, transportation, or cooking.
**2. Relevant Sections of Income Tax Act (TDS):**
* **Section 194C**: TDS on payments to contractors/sub-contractors for carrying out work including supply of labour for carrying out any work.
* **Section 194J**: TDS on fees for professional or technical services.
* **Section 194I**: TDS on rent.
* **Section 194M** (recently introduced): TDS on payments to individuals for professional or contract work exceeding Rs. 50 lakh.
**3. Why TDS is *Not* Applicable on Supply of Food Alone:**
* The key word in Section 194C is **“work”** — which means **service** or **contractual work**.
* Just supplying food (goods) without any service or labour component **does not amount to "work" under Section 194C**.
* The supplier is selling goods (food), not providing any labour or service beyond the supply.
* Since no labour or service contract is involved, **Section 194C is not applicable**.
**4. What if it were Catering Services?**
* If the supplier provides **catering services** (which includes cooking, serving, managing the food at the site), then it would be a **service contract**.
* In that case, **Section 194C applies**, and TDS is deductible @1% (if payment to an individual/HUF) or 2% (if payment to others).
---
### Conclusion:
* In your case, **only supply of food (lunch)** to workmen is involved.
* **No TDS is applicable under Section 194C or any other section** for such payment.
* The supplier is selling goods, and payment for goods is **not subject to TDS**.
---
### Reference:
* CBDT Circular No. 650 dated 7-6-1995 clarifies that **payment for supply of goods is not covered under Section 194C.**
* Supreme Court judgment in **CIT vs. Green Park Hotel (1989)** also differentiates between supply of goods and service contract for the purpose of TDS applicability.
---
If you want, I can help you draft a note for your accounts team or suppliers to clarify this.
Let me know!
---
### Applicability of TDS on Supply of Food to Workmen
**1. Nature of Payment:**
* The company is paying an individual supplier for **providing food (lunch) to workmen** based on orders placed.
* This is a **sale/supply of goods (food)** and **not a contract for services** like catering or supply with service element.
* The payment is for **supply of food alone** and not for any other service like labour, transportation, or cooking.
**2. Relevant Sections of Income Tax Act (TDS):**
* **Section 194C**: TDS on payments to contractors/sub-contractors for carrying out work including supply of labour for carrying out any work.
* **Section 194J**: TDS on fees for professional or technical services.
* **Section 194I**: TDS on rent.
* **Section 194M** (recently introduced): TDS on payments to individuals for professional or contract work exceeding Rs. 50 lakh.
**3. Why TDS is *Not* Applicable on Supply of Food Alone:**
* The key word in Section 194C is **“work”** — which means **service** or **contractual work**.
* Just supplying food (goods) without any service or labour component **does not amount to "work" under Section 194C**.
* The supplier is selling goods (food), not providing any labour or service beyond the supply.
* Since no labour or service contract is involved, **Section 194C is not applicable**.
**4. What if it were Catering Services?**
* If the supplier provides **catering services** (which includes cooking, serving, managing the food at the site), then it would be a **service contract**.
* In that case, **Section 194C applies**, and TDS is deductible @1% (if payment to an individual/HUF) or 2% (if payment to others).
---
### Conclusion:
* In your case, **only supply of food (lunch)** to workmen is involved.
* **No TDS is applicable under Section 194C or any other section** for such payment.
* The supplier is selling goods, and payment for goods is **not subject to TDS**.
---
### Reference:
* CBDT Circular No. 650 dated 7-6-1995 clarifies that **payment for supply of goods is not covered under Section 194C.**
* Supreme Court judgment in **CIT vs. Green Park Hotel (1989)** also differentiates between supply of goods and service contract for the purpose of TDS applicability.
---
If you want, I can help you draft a note for your accounts team or suppliers to clarify this.
Let me know!
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Credit rating model
- Insurance make against any item and later get insurance claim received
- 115-BAC-for AOP-private discretionary trust
- Youtube income
- GST APPEAL ITC
- Surcharge applicability on LTCG loss
- Multiple warehouse
- TDS U/S 194S VDA
- TCS Return Without PAN
- Surcharge on discretionary AOP/TRUST for AY 25-26
- IN PAGHDI SYSTERM . RENT RECPT CHANGE OF NAME AFTER FAMILY PARENTS TO SON
- Refund Claim in Next Year
- Query regarding applicability of UDIN on MCA forms signed using DSC by a Chartered Accountant
- GST ON PERSONAL MOTORCAR SOLD
- Cash gift by grand mother to her grand daughter
- APPLICABILITY OF RCM ON MAN POWER SUPPLY BY UN REGISTERED PERSON TO REGISTERED PERSON.
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Spice form, ? mark comes in address
- Tds on GST in connection with sale to public company
- B2B Amendment
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
