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tds on supply of beverages

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C.A FINAL
187 Points Posted on 22 March 2011

Pals,

A company engages the services of a person to supply beverages for their employees at a particular rate. the person brings the coffee machine milk and all other necessary materials. The company provides him with water and electricity. The person raises monthly invoice in which he claims VAT. 

Now when the company pays him, should TDS be deducted?

Also just because he claims VAT can we consider it as a contract of sale and pay him without deducting TDS.

Please clarify

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On 22 March 2011 at 19:52 Report
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glidor@gmail.com
21068 Points Posted on 22 March 2011
  • if the company is trading in readymade cofee then such deal is "purchase in relation to business and profession" and no TDS would be applicable.
  •  
  • but if the payment is related to "expenditure deductible from business income" then irrelevent of the fact that vat / servicetax /cst /exciseduty /customs duty or whatsoever duty has been charged, TDS would be deducted.
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On 22 March 2011 at 21:58
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C.A FINAL
187 Points Posted on 23 March 2011

No, the company is no way related to readymade beverages. The company is a BPO.

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On 23 March 2011 at 21:02
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glidor@gmail.com
21068 Points Posted on 23 March 2011
Originally posted by : Sasidhar Aruljothi

No, the company is no way related to readymade beverages. The company is a BPO.

in that case the payment is expenditure in company account, hence TDS is applicable on payment. u/s 194C

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On 23 March 2011 at 22:26


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