Tds on tender fee

Shreyansh (Student CA Final ) (53 Points)

20 June 2016

TDS deduct on tender fee or not?

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CA Harshal Totla (Chartered Accountant) (2224 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) (2224 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?