Whether TDS will be applicable if a company (suppose "A") makes an advance payment to another company (say "B") for procurement of materials ?
The situation here is that "A" company has entered into an agreement with "B" company for producing goods on it's behalf. Now "A" company has paid a huge sum of money (say 25 lakhs) to "B" company for procurement of material.
The payment is an advance and invoice is not yet received.
In my opinion its a pure advance for purchase of materials, hence TDS not required.
In my opinion its a pure advance for purchase of materials, hence TDS not required.
SIR
I THINKS
TDS IS NOT REQUIRE IN BUSNIESS OF SALE /PURCHASE INSTEAD OF PROPERTY (VALUE 50 LAC OR ABOVE)
“work” shall include-
manufacturing or supplying a product according to the requirement or specification of a customer by using materials purchased from such customer,but does not include manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from a person, other than such customer.
If it does not satisfy the definition of work as per IT Act, then such agreement will be not considered as contract U/s 194C. Hence TDS will not be applicable.
Triveni Turbine Limited
Bengaluru
CA
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