Are contractor TDS rates applicable for Sole Proprietors?

Hi there!

I run an internet services company that is a registered sole proprietorship in Bangalore and I have an urgent accounting query.

Now since this is a sole proprietorship, we do not have employees and projects are subcontracted, or outsourced to individuals across the country.

Now I need to know if this is enough to qualify me as a subcontractor/contractor. 

This is because I read that contractors/subcontractors according to 194C  have a TDS deduction of 1% only if it is an Individual. I am the sole proprietor, so does this apply to me?

Reason: Have a few transactions that need to come in but I have put it on hold because they claim they must deduct 10% TDS from the payment, but I think I come under purview of contractor since it is a sole proprietorship and I have no employees. What is the right amount of TDS that they should deduct ?

Thanks!

Neel