Dear Roshan, Here A is making payment to B. A himself owns the premises. And he is looking to deduct TDS on payment to B.

My question to you.. does A is making payment to B which is of rent payment in nature? Dear why would an owner himself pay rent, for a premise which belongs to him only, to some other person?

In this present query 'B' is allowed discount to 'A' and therefore 'B' is liable to deduct TDS not 'A' and it  shoould be deducted u/s 194H as B is giving discount (commission) for referring the patient to him by 'A'.

In no case 194I would apply.

Dear Manoj,

What you are saying would mean that 'A' is collecting the scan charges on behalf of 'B' from the patient and giving it to 'B' after taking its share of 30% as discount .Therefore the question of deducting TDS by 'A' will not arise.

User who has posted the query  wants to know whether 'A' is required to deduct TDS , if yes, then under which section.

what i have posted earlier, was upon the nature of transaction and taxability and not on how an owner can deduct TDS on payment made by him.

Ohhh... then fine! I thought as per your view TDS is to be deducted in the present case by A on payment to B u/s 194I. But now its clear, you are also of the same view that in present A will not deduct TDS.

Wait a minute.

The premises belongs to 'A'. 'B' is working in the premises of 'A'. The equipments and labour used by 'B' does not belong to 'A'. 'B' is a separate legal entity just like 'A'.

Not 'B' but 'A' is raising the invoice on behalf of 'B' recovering the scan charges from the patient , the services provided by 'B'. But there is no real invoice on rent, its only an understanding.

'A' is recovering the scan charges and reducting rent as a percentage on the scan charges say 30%.

The question is:

is 'A' raising an rent invoice on 'B' for using the premises of 'A'? 'A' is not because its only an understanding that 'A' will charge 30% on the scan charges, whatever be the amount. If 'A' raises invoice for rent, then 'A' will add service tax and 'B' will deduct TDS u/s 194I.

How is 'A' treating the rent recovered from scan charges paid to 'B'? Is 'A' treating it as rent received? If it is then 'B' will have to deduct TDS on that porttion of 30% which is withheld by 'A'.

Is 'B' raising an invoice for scan charges on 'A' or its patients? When 'A' is already charging scaning charges in its invoice for services provided by 'B', how will 'B' raise a separate invoice? And if 'B' is actually raising a rough invoice for the records, then how is 'B' treating the 30% deduction from the scan charges? If 'B' is raising an invoice on 'A', then 'A' can deduct TDS on full amount including the 30% portion u/s 194C.

I am not sure if such services provided by 'A' and 'B' comes under service tax net.

Still not clear please do refer any case law... if there . otherwise it will be a debtable issue ,   Wait  for best and suitable reply ..

it will all depend upon the agreement between the parties and who is raising the invoice upon whom and in what manner and also how  the receipts and payment is treated in the respective books of accounts.

i also agree with TDS u/s 194C

Anitha ,the very Billing system is not logical due to which the actual Deductee (A) has become Deuductor here. Actually B should raise the Bill (100%) for Scan / Lab charges and pay 30% thereof  to A as Occupancy charges or preferrably as Royalty after deducting the relevant / applicable TDS.

However A can collect the bill amount of B as presently being done - only the Book keeping enties should be modified to reflect that the amount is received on behalf of B -and later, after retaining it's dues, A can return the balance amount to B without  TDS.

It is payment from A to B who is rendering professional service.  Hence A has to deduct 10% on the amount it is paying to B u/s 194J.

Anandababu

under sec 194 J