tds on supply of beverages

Sasidhar Aruljothi (C.A FINAL) (187 Points)

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