One of my client is involved in Toll collection. It has entered into a contract with a vendor for supply and installation of toll collection software at the respective toll plazas.
The vendor provides invoice on periodical basis claiming completion of proportion work done at the toll plaza. The vendor attaches a Bill of Quantity statement to the invoice stating the exact work done. This statement is certified by my Clients toll supervisor. The Bill of Quantity details clearly identify the amount of material supplied and also the installation work undertaken by the vendor. Thus I am of the opinion that, since the document identifies the material cost and installation cost seperately, my client should deduct tax u/s 194C on the identified installation charges. Further, the installation charges are 11% of the total contract value which runs into crores of rupees.
Please guide me on the same, since the client is reluctant to deduct tax on the amount.
Regards
CAclubindia
