12 February 2013
Sir, in a instance case, a printer (providing material & service)prints for the client letterheads, envelops, vouchers , visiting cards and as per the specification provided by the client The amount of transaction exceeds the threashold limit of Rs. 75000/- Is tds u/s 194C attracted? Pls reply
12 February 2013
For purpose of section 194C work includes,
"manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from such customer,but does not include 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.'
So if the printer is purchasing material from a third party, then TDS u/s 194C would not be applicable.
12 February 2013
Please refer to the definition of work.
The printing work would be covered under definition of work only if material is purchased from the customer. In other cases, it would not be under the purview of work.
12 February 2013
In the case of Hindustan Shipyard Limited vs. State of Andhra Pradesh, (2000) 119 STC 533, the Supreme Court has observed that if anything to be delivered has individual existence before the delivery as the sole property of the party who is to deliver it, then it is a sale.
Undoubtedly the printed packing materials, before delivery, remain the property of the supplier. Property in the printed materials gets transferred to the payer only upon delivery. Therefore, such transaction would be one of sale.
It is only when the material is supplied by the customer and the printer merely prints on the material, it will be a case of contract for work, attracting the provisions of Section 194C. (It may also be noted that in most cases, the value of printing is insignificant compared to the value of packaging materials.) In view of the rulings of the Supreme Court and High courts cited above, supply of packaging materials with printing according to the specification of the customer is a transaction of sale and the provisions of Section 194C are not applicable to the payments received by the suppliers for such materials.
12 February 2013
as per ur interpretation, TDS is not applicable inspite of doing client work as per their specification. eg: if the letter head bears the name of the client ..it is not sellable over the counter to any other person,yet u suggest it is not works contract?
12 February 2013
as per ur interpretation, TDS is not applicable inspite of doing client work as per their specification. eg: if the letter head bears the name of the client ..it is not sellable over the counter to any other person,yet u suggest it is not works contract?
12 February 2013
My interpretation is based on definition of section 194C.
I did some search and came across the case law cited above.
The same views were expressed by the Andhra Pradesh High Court in State of Andhra Pradesh VS. Sri Krishna Power Press (1960) 11 STC 498, where the court further opined that the fact that goods prepared by the assessee could not be exhibited for sale to the general public is not decisive of the issue. In S.R.P. Works and Ruby Press VS. State of Andhra Pradesh (1972) 30 STC 195 (AP), it was held that supply of printed cinema tickets is a case of sale of finished products. It is immaterial that these tickets do not have any other commercial value.
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