TDS on supply of manpower

This query is : Resolved

Quick Summary

Manpower supply where employees remain on supplier payroll is treated as a contract, not professional service. TDS applies under section 194C, not 194J. Billing depends on agreement terms, typically manpower charges or service fees.

Samir

Samir (Querist)
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25 February 2008 Hi,

One of my client is a outsourcing company wherein they supply manpower to corporate where the employee are on the payroll of my client in turn my client received the payment from the corporate. I would like in this case will it be covered under profession or contract for the purpose of TDS.

Madhusudhan BS

Madhusudhan BS (Expert)
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25 February 2008 As your client is not providing any professional services, he is engaged only in supply of manpower, it would be covered by Contact for the purpose of TDS ie us 194C

Samir

Samir (Querist)
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25 February 2008 How he needs to prepare billing?Is the below the correct way.

Cost for supply of 3 staff is xxxxxx or
Staff salary for the month of Jan is xxxxx or is there any other way

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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25 February 2008 Normally these Man-power recruiting agency charge as a proportion of the Annual CTC of the employees the data-base of whom they have supplied. They describe it as services rendered in connection with recruitment of xxxxxxxxx.

MANAS ROUT

MANAS ROUT (Expert)
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25 February 2008 see, this depend upon how you have raised the biil,and what kind of agreement they have in between your client and that other company, on what basis they are allowing their manpower to work with them.

if they are providing any professional or techinical service then it wiil be covered under 194 J OR if they are manpower supplying company it will comeunder 194C or otherwise as the case may be.

Samir

Samir (Querist)
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25 February 2008 But in this case manpower are on the payroll of my client who in turn raise the bill to the corporate.So is this will BEtreated under section 194C OR 194j

Devendra Mishra

Devendra Mishra (Expert)
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25 February 2008 Here no proffessional service rendered, Hence under Contractor

CA Saurabh Maheshwari

CA Saurabh Maheshwari (Expert)
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25 February 2008 SINCE THEY ARE NOT PROVIDING ANY PROFESSIONAL OR TECHNICAL SERVICE AND THERE IS ONLY SUPPLY OF MANPOWER IT SEEMS TO BE CONTRACT AND THEREFORE TDS U/S 194C IS APPLICABLE(CONTRACT)