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Tds doubts..

AHAMED. B (3 'C' - Final) (273 Points)

08 December 2009

Hi frenz.. Can anyone clarify my doubt reg TDS?

Supply of coffee for which the co. makes payment at around Rs.10k per mth. Is TDS need to be deducted? Y am asking is that TDS is not applcbl for purchase of matls and the like.... Here the person has not claimed labour charges separately....

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17 Replies

CMA Ramesh Krishnan (Cost & Management Accountant) (71464 Points)
Replied 08 December 2009

It will attract Sec.194 If you are given contract for supplying monthly and paying monthly, so it will coming under contract and attract TDS as per sec194C

Tushar Mahendru (Learner) (125 Points)
Replied 08 December 2009

Hi,

Ahamed can u pls specify whether the vendor has installed the coffee machine and den supplying material?

if it's covered in above mentioned case then no tds is required to be deducted esle tds shall be deducted.

AHAMED. B (3 'C' - Final) (273 Points)
Replied 08 December 2009

Thanx Mr.Tushar.. Actually he is preparing coffee by himself in a room provided by the co and supplies the same to the employees of the co. The company deducts the room rent from the monthly bill as well....

shashank (CA final student) (259 Points)
Replied 08 December 2009

TDS would not be attracted as there is no contract between two parties. section 194c gets attracted only if there is contract. we can also assume that there will chances of shifting to another coffee vendor during the year. if the company wants

Tushar Mahendru (Learner) (125 Points)
Replied 08 December 2009

Yet ahamed no tds willbe deducted.

Tushar Mahendru (Learner) (125 Points)
Replied 08 December 2009

Shashank,

i just wanna know wht according to you constitute a contract??

according to me ant regular payment constitute a contract and is covered u/s 194C. in teh above mentioned case as ahamed specified that company has even provided a room to the vendor and tht probably seems to be for a long time and in every case a vendor can be changed any time. Hence i think principle element in above case is absence of service.

Wht say frndz?? Ur comments are welcome...

AHAMED. B (3 'C' - Final) (273 Points)
Replied 08 December 2009

Thanx Mr. Tushar.. Can u ans my other questn.. Tds u/s 194c or 194j??

AHAMED. B (3 'C' - Final) (273 Points)
Replied 08 December 2009

Mr.Tushar.. Is ur ans is no bcoz of absence of labour charges in the bill? pls clarify..

Tushar Mahendru (Learner) (125 Points)
Replied 08 December 2009

If TDS would be deducted it shallbe u/s 194C.

Yes ahamd the more dominant factor is absence of labour/ service charges.

Let me give you an example ;

In case of repairing of any asset supposing you got a part replaceda and that also includes serviec charges, on whta amount will you deduct TDS??

shashank (CA final student) (259 Points)
Replied 08 December 2009

tushar

contract means there should be writeen agreement between two parties. oral contracts can't be considerd. and no tds applicabilty on such contracts according to section 194c

AHAMED. B (3 'C' - Final) (273 Points)
Replied 09 December 2009

yes Tushar.. Tds shud be deducted only on labour charges and it shud exclude value of materials.....

Sashank.. U r also correct in the sense that there shud be written contracts.. But take the case of advertising.. Are the companies making written contracts? Wat wil u do if there is no written contract and if the payment made to an advertising agency for Rs.60k for advertising in various news papers???

Tushar Mahendru (Learner) (125 Points)
Replied 09 December 2009

Hey ahamed,

I beleive that tds will be deducted.

i would lyk to correct myslf. i have been undergoing continous thnkng that if we are deducting TDS on catering service den y not on dis?

also read sumwhr tht if the contract involves any material and service and both the components can not be segregated then tds shall be deducted on gross amount.

views abov are welcom.......

CA. Anubhav Jaggi (CA) (104 Points)
Replied 09 December 2009

Soumya Ranjan Pradhan (Chennai) (21 Points)
Replied 15 June 2011

I want to know that suppose one client has deducted TDS from payment for the ay 10-11 and credit has not been availed during that year . Whether i can i take the benefit in AY 11-12 or not .