tds applicability

TDS / TCS 676 views 2 replies

Dear members,

please tell me applicabilty of contractor TDS on following issue:

ABC Ltd purchase raw material and process a semi-finished goods, after that sales to XYZ co. including vat. Also XYZ co. process such semi finished goods into next semi finished goods exclusively for ABC Ltd. and sale to ABC Ltd including vat.

 Query: Whether ABC Ltd is liable to deduct tax for payment to  XYZ co.?

Thank You

 

Replies (2)

Hi

Tds deducted by ABC Ltds @ 2% because XYZ ltd Process semi finsihed goods exclusivey for ABC Ltd

 


HERE, ONE HAS TO CHECK THE CONTRACT BETWEEN ABC LTD AND XYZ LTD...

IF THE WORK DONE BY XYZ LTD WAS AS PER SPECIFIC RECOMMENDATION BY ABC LTD (I.E. AS PER THE DIRECTIONS GIVEN AND NOT A REGULAR WORK BY XYZ LTD), THEN TDS LIABILITY ATTRACTED U/S 194(1)

IF THE WORK DONE BY XYZ LTD IS A REGULAR WORK WHICH HE DOES FOR OTHERS ALSO, THEN ONE CAN SAY THAT THERE IS NO SPECIFIC CONTRACT AND THERE IS NO NEED TO DEDUCT TAX AT SOURCE.

aadhyayan @ gmail.com


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