Tds on painting contractor

1% TDS in case of Individual or 2% in case of other than Individual on invoice value. If labour charges shown seperately TDS will be deducted only on labour.

If not shown seperately? Should it be deducted on whole invoice value excluding GST?

Painter has given one bill, he is mentioned only material cost, but is not given labor cost in the invoice, can we deduct the TDS on the base value?

Please suggest..

In theory it doesn't matter if the material and labour are charged on the same invoice, so long as the distinction is clear.

In practice, most auditors tend to come up with the silly logic of TDS to be deducted on everything including goods clearly not subject to TDS if it is a single invoice.

But as Mr Tapse said above, 1 or 2 percent, depending on the type of contractor.

Answering the follow-ups:

• Painting with paint supplied by the contractor is a works contract, i.e. "work" under Sec 194C. TDS is on the whole invoice value (labour + material), excluding GST if shown separately (CBDT Circular 23/2017).

• The material-exclusion rule in Sec 194C (Explanation (iv)(e) and the related proviso) applies only to manufacturing or supplying a product to the customer's specification using material bought from the customer, not to service contracts like painting. So even if material is shown separately, most practitioners deduct on the full value for a painting contract.

• If the invoice is purely for material (paint sold, no service), it is a sale of goods. No 194C, though 194Q may apply if your turnover exceeds Rs 10 crore and purchases from that supplier exceed Rs 50 lakh.

• Rates: 1% (individual/HUF), 2% (others). Threshold Rs 30,000 per bill or Rs 1 lakh a year.

• If the painter declares he owns 10 or fewer goods carriages, the Sec 194C(6) exemption does not apply. That is only for transporters.