TDS On Works Contract

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193 Points Posted on 27 January 2020
>One company entered works contract with another company for construction of solar plant.
>Based on contract, contractor billing the other party for supply of goods and services showing separately in the same invoice.
>Now my doubt is on what value, TDS need to be deducted????
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On 27 January 2020 at 11:13 Report
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This discussion addresses the deduction of Tax Deducted at Source (TDS) on works contracts, specifically when a company bills for both goods and services in a single invoice for a solar plant construction. The key question is on what value TDS should be deducted. Advice suggests that if the contract is composite, TDS applies to labour and services, but ideally, separate invoices for materials and labour would clarify this. Paying for materials and services separately is also recommended to avoid issues.

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28261 Points Posted on 27 January 2020
Please upload the work whether it's a composite order or not.
Depending on the same the rate will be ascertained.
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On 27 January 2020 at 11:20
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193 Points Posted on 27 January 2020
It is composite order
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On 27 January 2020 at 11:29
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17269 Points Posted on 27 January 2020
Better if contractor issues seperate invoices - one for materials and another for labour and other services.

if it's identifiable in this way, there may not be TDS on materials payments.

TDS will be at applicable rate on labour and other services bill.

One more caution is to pay by seperate cheques or Online modes seperately for material invoice and Labour other charges invoice.
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On 27 January 2020 at 11:39
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193 Points Posted on 27 January 2020
How to handle past transactions. Tds was deducted on service only
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On 27 January 2020 at 12:31
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17269 Points Posted on 27 January 2020
There is no answer for hypothetical question. Let it come and at that time you automatically know to handle it. Right now, Njoy
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On 27 January 2020 at 23:13
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28261 Points Posted on 11 February 2020
@ naveen
composite work related to what?
the entire work order is required.
construction of solar has a rate.
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On 11 February 2020 at 07:38

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