whether TDS deductible on Repairs & Maintenance of Machinery

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Repairs and maintenance of plant and machinery generally attract TDS under Section 194C if they are routine work contracts. If the work involves technical services, Section 194J may apply. Service tax is payable by the service provider, while TDS is generally deducted on the payment, including the service tax component.

Ca Anurag

Ca Anurag (Querist)
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13 April 2009 whether repairs & main. of Plant & Machinery amounts to contract for TDS liability? And whether Service tax liability also arises to be deducted from the payment made to contractee??

Shyam Lal Naik

Shyam Lal Naik (Expert)
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13 April 2009 Repairs & Maintenance are contract for carrying out any work and is exiligible to TDS u/s 194C.

CBDT has clarified in a circulat that TDS needs to be deducted in case of AMC. The queried work is of the same nature.

The contractee is the service provider. Service tax is applicable under the catagory of "Management, Maintenance or repaire service".

Service tax liability of the service provider. The same should be paid to the contractee. No need to deduct.

TDS must be deducted on the service tax element as well.

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Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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13 April 2009 Routine,normal maintenance contracts which include supply of spares will be liable to TDS U/s 194C. However, where technical services are rendered,TDS will be u/s 194J. Ref:- Circular No 715 reported in 215 ITR (st)17- vide question no.29. Pl check whether your case fit in to the citation.
As far as service tax is concerned, Mr. Shyam Lal's view may be considered.

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