Tds under sec 194c

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Querist : Anonymous

Querist : Anonymous (Querist)

20 September 2011 hello,
please answer this, my company is wholly supplying to x company, for some finished goods we are using the raw material purchased from x company and again selling to x company, i am calculating the tds as, sales minus raw material purchased from x company *2%. but in some cases we use x company material very less and balance material is ours in this case tds is coming more because of our material cost more. so iwant to know is this Calculation is correct. and also tell me, is tds comes,if we purchase rawmaterial from xcompany and selling to them agin. we cant treat it as normal sales.
Waiting For your Valuable Answers. very urgent please share

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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21 September 2011 where the invoice clearly mentioned material & labour then TDS apply only on Labour portion please read the section

According to section 194C subsection 3 provides the following

(3) Where any sum is paid or credited for carrying out any work mentioned in sub-clause (e) of clause (iv) of the Explanation, tax shall be deducted at source—

(i) on the invoice value excluding the value of material, if such value is mentioned separately in the invoice; or

(ii) on the whole of the invoice value, if the value of material is not mentioned separately in the invoice.

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