dear members
i have a doubt regarding tds on installation of office equipment,(vertical blends) whether tds is deductable on the total amount of bill,if there is no breakup for material and labour in the bill and there is no separate identity in BOQ,then on what basis tds to be deducted,
plz give reply as son as possible
TDS has to be deducted on the entire amount.
deduct on the entire amount @ highest rate.
Dear Mr. Raju,
In my opinion you have to deduct tax on whole of the amount of bill/credited/paid u/s 194C as there is no different contracts. My views are based on following guidelines.
(b) Where, however, the contractor, undertakes to supply any article or thing fabricated according to the specifications given by Government or any other specified person and the property in such article or thing passes to the Government or such person only after such article or thing is delivered, the contract will be a contract for sale and as such outside the purview of this section.
(c) In State of Himachal Pradesh v. Associated Hotels of India Ltd. [1972] 29 STC 474, the Supreme Court observed that where the principal objective of work undertaken by the payee of the price is not the transfer of a chattel qua chattel, contract is of work and labour. The test is whether or not the work and labour bestowed end in anything that can properly become the subject of sale; neither the ownership of the materials nor the value of skill and labour as compared with the value of the materials is conclusive although such matters may be taken into consideration in determining, in the circumstances of a particular case, whether the contract is, in substance, one of work and labour or one for the sale of a chattel. A building contract or a contract under which a movable is fixed to another chattel or on the land, where the intention plainly is not to sell the article but to improve the land or the chattel and the consideration is not for the transfer of the chattel, but for the labour and work done and the material furnished, the contract will be one of work and labour. In case of doubt whether a particular contract is a contract for work and labour or for sale, the matter should be decided in the light of the principles laid down by the Supreme Court in the above-mentioned case.
Thanks
Only check if he has sold the blinds to you with a VAT included or charge bill. Sometimes, installation is free as a courtesy but not written any where. You buy an A/C and the dealer may fix it for you free. That is sale of a/c. If your blinds dealer has charged you VAT on the entire amount it will be a sale contract and TDS is applicable only if you have supplied him with materials to make the blinds and not if he has procured the materials from elsewhere to make the blinds and sell to you.
| Originally posted by :Sunil | ||
| " | Only check if he has sold the blinds to you with a VAT included or charge bill. Sometimes, installation is free as a courtesy but not written any where. You buy an A/C and the dealer may fix it for you free. That is sale of a/c. If your blinds dealer has charged you VAT on the entire amount it will be a sale contract and TDS is applicable only if you have supplied him with materials to make the blinds and not if he has procured the materials from elsewhere to make the blinds and sell to you. | " |
But sunil when the vendor is fitting the interiors, the sequence of activities is of a works contract right, even though he is not charging for it?
A further test may also be applied in my opinion, that if vendor charges VAT and service tax applicable to works contracts (such as compounding rate), then 194C will be attracted undoubtedly, no matter what is put on the BOQ (from my experience in cell phone tower erection business)
can any one abbrevate what is BOQ?
BOQ MEANS
BILL OF QUANTITY
Thanks Mr Balaji for the reply
CAclubindia
