Practice
148 Points
Posted on 02 March 2013
Dear Manish,
The situation you have told may get covered under the work definition of Sec 194 C which says that "manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from such customer". Sec 194 C is very broad in scope to consider certain transactions as deemed contracts. So even if your case is not covered under the above clause it may as well be interpreted as an implied contract. Hence to avoid any future litigations and further outflow in the form of interest it is advisable to deduct as no where it has been said tds need not be deducted for your case.
Kindly correct me if i am wrong.
Regards
Prashanth.