Tds on goods plus services

This payment is in the nature of contract. TDS will be deducted u/s 194C @ 1% if deductee is individual / HUF, else @ 2%, if single payment exceeds 30000/- or exceed aggregate 75000/- during FY on entire invoice amount.

 

 

Hi Trishanku,

If the supplier supplied the material along with logo and charges the local sales tax, there is no TDS on the maerial supplied along with logo  and there is no contract work involved in it. 

If u provided the material to the contractor and the contractor has printed the logo on the material, in this case 194C will attarct and u can deduct tds on the contract amount.

for the above question, there are number of case laws, u can download the same from any website relating to IT

Dear Gupta Sir,

              Can you  please mention the Case Law in detail with its Pratical Application

              Thanking in advance

Hi Trishanku,

Circular Number 681 of the Income Tax  - Where, however, the contractor undertakes to supply any article or thing fabricated according to the specifications given by Government or any other specified person and the property in such article or thing passes to the Government or such person only after such article or thing is delivered, the contract will be a contract for sale and as such outside the purview of this section.

U can down load the circular from any website relating to income tax

Further there are different opinions on the same issue.  U can take advise from your statutory auditors, becaz at the time of scrutiny they will help u in this regard.

Please ensure 1st that the goods are SOLD( inclusive of printing), after charging the requisite VAT/CSTin your invoice, if the conditions confirm then the jewellary shop has to consider the same as Packing box purchase, and purchase a/c is not liable for TDS. 

 

I forgot to mention that the shop avails input VAT credit on the box ( Packing material )  purchased.

On purchase it records this as box and packing stock

and at the year end adjusting entry is passed by debiting box exp and crediting box stock

 

Now, should TDS be deducted ?????

Plz guide me.

Thank you all.

 

TDS is not deducted in this case since invoice which is given to you by your seller has VAT charged in it. Meaning thereby it is your puchase purely. TDS is deducted on expenses not on purchases.

 

If invoice might show VAT and Service tax (ST), then TDS liablility will come since ST implies rendering of some service by seller in addition to goods/ material.

I read this case and having some cofusion
please clarify...

 

The boxes are not core product for a jewellary business, they are not doing the business of purchasing and selling "BOXES" then how can prop./business can avail VAT credit?
 

Dheeraj,

 

VAT credit is available in case of packing materials for sure

u're asking whether TDS is applicable on service(writting the shop name in boxes). is the supplier is providied the seperate invoice for the service.

if not, then TDS is not attract on purchases.

 

Hi, As per Section 194C, works contract means a contract to supply labour along with goods. Since in your case both are involved, there is a necessity to follow the provisions under section 194C. In case of work contract being manufacturing or supplying product according to the specification of customer (by using the material purchased from such customer), TDS shall be deducted on the invoice excluding the value of material purchased from such customer if such value is mentioned separately in the invoice.

Originally posted by : CA. NARAYAN BHANDARI
	TDS shall be deducted on the invoice excluding the value of material purchased from such customer if such value is mentioned separately in the invoice.