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Job work scrap tds

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Rajesh PB

80 Points Posted on 22 August 2020

Greetings ,

Im issuing raw materials for job work , the job worker does the job give me finished material, he reatains his wages as scraps that comes when processing. So I need to make that scraps as sales invoice to him .

In this case I'm not paying as cash to him , need to deduct tds ?

When mix mode scraps sales and cash payment need to deduct tds ?

Replies (3)

Quick Summary

This discussion clarifies the rules around Tax Deducted at Source (TDS) for job work involving raw materials and scrap sales. It explains that if scrap is treated as consideration other than cash, it constitutes a taxable supply requiring an invoice. TDS implications arise if the total payment (including scrap value and cash) exceeds the threshold of £30,000 per payment or £100,000 annually, even if the job worker is unregistered. The key is whether the scrap sale is part of the overall consideration for the job work.

Taha

405 Points Posted on 23 August 2020

The supply is for consideration other than cash so it is a taxable supply because supply covers sale transfer barter lease exchange and yes u need to make a invoice also the amount of scrap sales by him will be the taxable value of supply but if u have not taken itc on raw materials then no need to pay tax assuming job worker is taxable person as u r not paying cash but still tds is applicable if payment exceeds 30000 per payment or 1lakh in a year in mix mode add sale value +cash for tds and gst