Very urgent ...tds coes or not

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This query is : Resolved

CA Aditya (Querist)

04 July 2012 Dear Experts,

Can you plz clarify the following:

1) My clinet paid 340000 to Electricity Board( BESCOM) Karnataka.. towards eSupervision charges for connection now 194 c or 194 J comes..( Plase provide Justification also)

2) We have to pay 800000 to contractor of food supply to my employees, in invoice it has been charges VAT will TDS would come or Not...( Only VAT has been charged.. So i opined NO TDS because VATABLE invoice..)

Please confirm..

Swift reply highly appreciated

Regards
Aditya

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

04 July 2012 1.Electricity distribution agencies covered under Govt Agencies and payment to electricity boards for various work not comes under purview of 'Works" under Sec.194C also not covered under 194J, Hence my view TDS not applicable on Supervision charges paid to BESCOM

2.According to circular no:715 of Income tax. food served in the hotels , restaurants or cafes does not attract TDS, how ever, if the food is supplied based on contract it will be treated as Catering Contract the TDS will apply on the bills

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CA Prashant Gupta

CA Prashant Gupta (Expert)

05 July 2012 sorry but don't agree with CMA Ramesh Krishnana. Electricity agencies are covered under Govt agencies but that is for 194-I only. in 194 C and 194 J both don't prevent to deduct TDS. In 194 C govt ageencies are specified person, so 194 C can be applied on Govt agencies. and 194 J doesn't give exemption to Govt agencies. in present case it is supervision charge so TDS will be 194 J i.e. 10%

for second case it is contract of food so 194 C will be applicable.

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CA.Sourabh Sethia

CA.Sourabh Sethia (Expert)

05 July 2012 In my opinion for the first case it does not come under TDS u/s 194c it comes under 194j the issue is yet under clarification so tds to be deducted.
in 2nd case
if you have supplied them the material of food and the person has just worked as caterer (i.e. supplied you the end product) then this is covered by TDS
but if it is that he had suupplied you the food directly then it does not attract TDS it is contract of sale not a contract of work

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