TDS on Vat

This query is : Resolved 

Querist : Anonymous (Querist) 12 August 2010

Can TDS be deducted on the bill amount if bill amount also includes some portion of vat tax?
give answer with some reference

CA.Amit Revankar (Expert)
12 August 2010

The wording of section 194C Start with " Any sum paid" which clear cut indicate that TDS has to be deducted on entire sum, Subsequently notification, circular are issued to clarify the matter in some areas. For eg incase of work contract, it is cleared that if contractor give sept bill for goods sold and his service charges than TDS u/s 194C will be on Service charges otherwise on whole, without excluding any statutory duties.

Aditya Maheshwari (Expert)
12 August 2010

TDS u/s 194C not deductible in case where manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from a person, other than such customer.

If the above is done and VAT is charged then TDS not required to be deducted on the bill.

CA.ViVeK M ACA (Expert)
12 August 2010

Fact of the cases

Deduction of TDS on VAT amount

Provisio of Income Tax Act
Event attracting TDS
Any sum paid to a resident contractor or sub contractor in connection with the work undertaken by him

So if the bill amount include VAT, then TDS required to be deducted


TDS required to be deducted on the VAT amount.

Aditya Maheshwari (Expert)
12 August 2010

Dear Vivek
The query asked is whether TDS can be deducted on the biils where VAT has been charged in the bill or not and not whether TDS should be deducted on VAT. Please see what the query has been asked.

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