Tds on labour charges to foreign co.

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Whether TDS is applicable for payment made for Labour Charges towards installation of Machiney purchased from Foreign Company?. Co has issued separate bill describing " LABOUR CHARGES"

If Yes, then under which section and how to deposit the deducted amount?

Replies (2)
Tds needs to be deducted under sec 194C...

If it is project, assembly and the installation is only incidental to sale of machinery the foreign company can claim exemption under section 9(1) (vii) exclusiion for labour charges. In DTAA also, service linked with sale of machinery exemption is available.But if it is design, fabrication, supply, service etc contract has to be seen as divisible or indivisible.

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