LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

Deduction of tds (194j) - testing charges

V Ravi Kumar (Accountant) (47 Points)

13 May 2017

Dear Experts,

We are engaged in the business of "Civil Construction Works" and recently awarded "Admin Building" works contract from UP Electricity Board. Our client requested us to produce "Lab Test Certificates". That to be issued from any "Government Undertaking" laboratory for civil consturction materials.

Therefore, we have received quotation from the "National Test House" (GOVERNMENT OF INDIA , MINISTRY OF CONSUMER AFFAIRS, FOOD & PUBLIC DISTRIBUTION DEPARTMENT OF CONSUMER AFFAIRS) towards "Testing Charges".

My question is whether TDS 194J deductable on Testing Charges payable to "National Test House" (GOVERNMENT OF INDIA , MINISTRY OF CONSUMER AFFAIRS, FOOD & PUBLIC DISTRIBUTION DEPARTMENT OF CONSUMER AFFAIRS).

Thanks,

Ravi

Reply
Follow
Share

12 Replies

RAMA KRISHNAN (247 Points)
Replied 13 May 2017

as per my view tds liability doesn't arise. let's wait for experts advice

Mayur (Partner @ Mayur Thakkar & Co.) (3111 Points)
Replied 13 May 2017

196. 2 Interest or dividend or other sums payable to Government, Reserve Bank or certain corporations Notwithstanding anything contained in the foregoing provisions of this Chapter, no deduction of tax shall be made by any person from any sums payable to-

(i) the Government, or

(ii) the Reserve Bank of India, or

(iii) a corporation established by or under a Central Act which is, under any law for the time being in force, exempt from income- tax on its income, or

(iv) a Mutual Fund specified under clause (23D) of section 10, where such sum is payable to it by way of interest or dividend in respect of any securities or shares owned by it or in which it has full beneficial interest, or any other income accruing or arising to it.]

Mayur (Partner @ Mayur Thakkar & Co.) (3111 Points)
Replied 13 May 2017

Not required to deduct TDS

Mayur (Partner @ Mayur Thakkar & Co.) (3111 Points)
Replied 13 May 2017

above quoted is section 196

Peter (Article Assistant) (118 Points)
Replied 14 May 2017

1. The above expense will be liable for TDS deduction as it is a fees in the nature of technical services.

Mayur (Partner @ Mayur Thakkar & Co.) (3111 Points)
Replied 14 May 2017

@ peter so how does it make a y difference?

Nomit Jain (na) (35 Points)
Replied 14 May 2017

in my view since its a government body , there is no need to deduct tds...
the same way when u are making a payment to BIS , they have expressly provided that tds should not be deducted.

V Ravi Kumar (Accountant) (47 Points)
Replied 15 May 2017

Thanks a lot sir's, For providing your opinion. But, I have been asked to deduct TDS from cited payment by a practicing CA. What should I do now? Please suggest.

Mayur (Partner @ Mayur Thakkar & Co.) (3111 Points)
Replied 15 May 2017

CAs always take the safer side. Now actually its in your hand to deal with the topic. You can also refer section 196 to your CA and ask his opinion in that regard.

Mayur (Partner @ Mayur Thakkar & Co.) (3111 Points)
Replied 15 May 2017

and you can also ask him why he wants you to deduct the TDS. By the way will the national test house agree with you if you deduct the TDS. that is also to be seen.

CA Mayur Thakkar

M. no. 8530089839

V Ravi Kumar (Accountant) (47 Points)
Replied 15 May 2017

Thanks a lot sir for your kind advise..

V Ravi Kumar (Accountant) (47 Points)
Replied 15 May 2017

Dear Sir,

I have also gone thorugh sec. 196. accordingly I am not willing to deduct tax. Meanwhile, I have been asked by National Test House to avoide deduction of TDS from "Testing Service Charges".

Regards,

Ravi