TDS on Purchase Query

As the TCS was already applied over the transaction; sec, 194Q is not applicable. TDS need not be deducted.

Even if TCS would not have been collected by the seller, 194Q would not apply if invoice is pertaining to a period prior to 1st July 2021.

That is if either invoice or payment is accounted/made prior to 1st July 2021, 194Q would not apply when such invoice is subsequently paid or when such invoice is subsequently accounted, as applicable.

TCS so Charged in the invoice is reversed through a credit note by the vendor. He is following receipt basis for depositing TCS to the government. since our client paid amount in july month and our turnover is more than 10 crores in the previous year the vendor opines that our client have to deduct tds u/s 194Q while paying amount to them. 

This point has clearly been clarified by CBDT vide their circular no.13 of 2021 dated 30th June, 2021.

Refer clause 4.2 of the circular for more:

https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&ved=2ahUKEwjxvabP5uzyAhW5xjgGHfxYC5oQFnoECAMQAQ&url=https%3A%2F%2Fwww.incometaxindia.gov.in%2Fcommunications%2Fcircular%2Fcircular_13_2021.pdf&usg=AOvVaw3AOONc0iPm2y4KPEP3Bqlr