TDS u/s. 194C
This query is : Resolved
16 February 2010
A contractors raises bill which includes the following elements:
Bill Amount xxx
VAT @ 2% xxx
Service Tax 10.30% xx
TOTAL AMOUNT XXXXXX
QUERY : Whether TDS u/s 194C is deductible on the total bill amount i.e. incl. VAT element (Works contract tax) or excluding VAT amount?
Bill Amount xxx
VAT @ 2% xxx
Service Tax 10.30% xx
TOTAL AMOUNT XXXXXX
QUERY : Whether TDS u/s 194C is deductible on the total bill amount i.e. incl. VAT element (Works contract tax) or excluding VAT amount?
CA Prashant Gupta
(Expert)
16 February 2010
if only this information then deduct TDS on full amount.
16 February 2010
Well that is the safest remedy. But it would amount to deducting TDS on VAT i.e. tax on tax.
Just as there is a clarification by way of circular that in the case of TDS on Rent (sec.194I) TDS is not to be deducted on service tax element, similary is there any case law / circular in the case of TDS on VAT?
Just as there is a clarification by way of circular that in the case of TDS on Rent (sec.194I) TDS is not to be deducted on service tax element, similary is there any case law / circular in the case of TDS on VAT?
CA Chitresh Gupta
(Expert)
16 February 2010
I Agree with Prashant.
The wording used in section 194C and section 194I is different.
194C refers to "any sum paid" to resident contactor while section 194I refer to "any person responsible paying any income by way of rent".
The term any sum paid includes the vat while income can't include the vat.
Hope this clarifies the matter
regards
The wording used in section 194C and section 194I is different.
194C refers to "any sum paid" to resident contactor while section 194I refer to "any person responsible paying any income by way of rent".
The term any sum paid includes the vat while income can't include the vat.
Hope this clarifies the matter
regards
CMA Ramesh Krishnan
(Expert)
16 February 2010
Dear Rachit,
TDS on rent exclusive of service tax department given separate exception,but other TDS sections all are inclusive of sevice tax. In your query nature of payment or expenses nature is not clear.so my view also.Inclusive of VAT only
TDS on rent exclusive of service tax department given separate exception,but other TDS sections all are inclusive of sevice tax. In your query nature of payment or expenses nature is not clear.so my view also.Inclusive of VAT only
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