Tds issue

normally in case of job work, vat is not applicable. but where additional material have been used, the job worker can charge value of such materials with vat as applicable on it.

tds u/s 194C will be deducted only on service portion, where the invoice separately mentions the service charges in it. where the amt. in invoice issued by job worker, does not separately show value of material and service charges then tds to be deducted on whole amt including vat.

Hi,

Jobwork is covered under finance act. Hence service tax need to be paid, and TDS should be deducted. Incase VAT is charged, this means there is a sale of goods involved, which does not involve deduction of TDS.

TDS need to be deducted on service portion only.

For any further uery PM or mail me.

AJH & CO.

anubhavjain @ ajhco.in

one point here that if the job work done results in a new product that is new h.s. code under excise then service tax will not be payable as it will amount to manufacturing.

Dear All 

TDS has to be paid on total value of the bill if service and Vat portion are together billed. Eg: 

A works contract bill is given for RS 10000.00 Here the contractor bills VAT @ 70% and Labour @ 30%. Then the value is read as under: 7000+VAT 5% RS 350+ 3000 Labour. The total value of the bill is RS 10350.00. The TDS @ 2% is payable by Contractee is RS 207 and the net amount payable is RS 10143.00. This is very clear. Though the above work is Job Work VAT is applicable if the Contractor is not able to apportion material and Labour from their Work.But TDS is always deductable on the total amount of the bill only.

Jayam ramesh K C