Tds on tender fee
Shreyansh (Student CA Final ) (53 Points)
20 June 2016
TDS deduct on tender fee or not?
5 Replies
CA Harshal Totla
(Chartered Accountant)
(2229 Points)
Replied 20 June 2016
Can you please elaborate the nature of work
Shreyansh
(Student CA Final )
(53 Points)
Replied 20 June 2016
Tender is for making of scrapper barrels. It is open for all mfg. co. My co. is also applied for it. It fees is around rs. 65,000.
CA Harshal Totla
(Chartered Accountant)
(2229 Points)
Replied 20 June 2016
This case comes under section 194C (TDS on contracts). tds is to be deducted @ 1% where the payment is being made or credit is being given to an individual or a Hindu undivided family, in other cases @ 2%. If such work includes material value also and is shown separately in the invoice then material value shall be deducted from the total amount. There is a threshold limit provided under this section according to which no tds shall be deducted under this section if such sum does not exceeds Rs.30000(individual payments) or in aggregate does not exceeds Rs.1 Lac.
Mansi Almeida
(Service)
(39 Points)
Replied 16 June 2017
On a similar line, as a part of tender agreement for purchase of coal, the assessee is required to pay Rs.2.5 per tonne as processing fee which will be only payable if the tender is granted. Will this processing fee attract TDS provisions?
Sanjay Vyas
(Co-founder)
(92 Points)
Replied 21 May 2018
Tax deduction at source will result in temporarily blockage of funds for contractors. It may negatively impact working capital requirements of contractors who are working at very low scale. It may be noted that such contractor may take input tax credit of the TDS deducted by the Government after claiming the credit in the monthly return which is related to the month in which TDS is to be deducted by the Government. However, the provision relating to TDS under GST law is put on hold for the time being and the same will be brought into force from a date which will be notified later. For any information please visit https://www.tendersontime.com/publish-tender/
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