TDS on Barter Deal

TDS is required to be deducted by the person "responsible for payment".  In barter deals you are not responsible for payment, you are noy paying any body- you are merely exvchanging goods. And hence TDS provisions are not applicable.

Hello Friends

I am still confused whether we have to deduct the tds or not

if yes , then both parties has to deduct the tds 

can u provide me the relevent case law 

waiting for your replies friends

You will have to book income, expense. At the time of income booking party's A/c will be debited and same should be credited at the time of booking of expense so 3rd entry will not be required. You have to deduct tax at source even if you pass only one entry to book income and expense and do not credit party's A/c.

Kindly see the highlighted part of the Act:

Payments to contractors.

¹⁵194C. (1) Any person responsible for paying any sum to any resident (hereafter in this section referred to as the contractor¹⁶) for carrying out any work¹⁶ (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and a specified person shall, at the time of credit of such sum to the account of the contractor or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier

So, even if actual payment is not made, your case will be covered under payment by 'any other mode' as mentioned in the Act itself.

I hope now it's clear to you.