Tds on fabrication & body building

Originally posted by : Ghanshyam Gangji
	Dear All, Is TDS to be deducted on payment to be made for fabrication & body building of a chassis? If yes then which tds provision will apply. The amount on PO issued is Rs.73000 exclusive of vat @ 14.5%. Now we are making a payment of only Rs.36500. What should be the TDS to be cut?

TDS provisions u/s 194C are not applicable.
Refer Andhra Pradesh State Road vs Deputy Commissioner Of Income Tax on 20 November, 2000. https://www.indiankanoon.org/doc/1021118/?type=print
Relevant Points:-
1)	Dominant object and intention between the parties was to construct and sell and purchase the bus bodies in terms of the requirements and specifications indicated and deliver them duly fitted on the chassis supplied.
2)	The materials involved in the construction of the bus bodies were to be procured by the fabricators and thereafter bus bodies were to be constructed and to be fitted on the chassis supplied.
3)	At no point of time, assessee had any property or ownership in the material used in bus body building or in the bus body itself unless these were delivered to the assessee and approved by the assessee for final use.
4)	Property in the bus bodies was to pass on acceptance of bus bodies by the assessee.
5)	Purchase of any item which is constructed as per agreed specifications would involve labour and skill but these two elements by themselves alone are not enough to turn the transaction of sale into transaction of "work".
6)	Whole exercise involved resulted into purchase and sale of bus bodies.

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