MEANING OF VALUE UNDER A CONTRACT

Sir, Thank you for your reply, I know that if the contract value exceeds Rs. 2.50 Lakhs then TDS needs to be deducted, but in our case there is no such formal contract, here we are raising bills on monthly basis and the individual amount does't exceed Rs. 2.50 lakhs, but when monthly bills put together for a whole year then the amount exceeds Rs. 2.50 lakhs, now whether TDS needs to be deducted or not.

Drafters of the above provision created unnecessary confusions in the minds of public, they could have simply wrote as if the aggregate payments exceed Rs. 2.50 lakhs in a year then TDS needs to be deducted instead of all this value of contract etc, even there is no proper explanation to that.

If the recipient issues a separate service order for every month then no TDS required but if not then it will be difficult to prove that a contract do not exist where monthly service is being provided. Although in absence of contract or service order each invoice is considered as separate contract technically.

Oral agreements are difficult to prove. The only documentary proof is invoice which is in itself can be considered as independent supply and independent. This is technical 

However it is quite unlikely in practical business that services year long are being provided continuously without contract or service orders. 

Technical thoughts can be argued and won in courts

Which orders?

The technical aspect is totally valid as per contract act

Yes its TDS under GST. TDS under IT act act is applicable as it will exceed the limit for the FY.

But in GST TDS it depends on the contract and if no contract is present then individual transactions are to be taken as independent contracts.

Individual service orders is a good practice as there is complete transparency. Continuous invoices without service orders or contract is not a good practice but technically as per contract act it is an independent contract.

Since oral contracts cannot be proved technically individual invoices will get considered as individual contracts.

And therefore GST TDS may not get mandatory on such transactions

Now you are shifting from technical aspect.

I already said practically services always provided against service orders or contracts.

But technically if such a situation exists where there is no contract or order, TDS may not get applicable for individual invoices if value does not exceed the limit individually.