tds query for 194 C

TDS / TCS 1455 views 4 replies

PIYUSH AGARWAL

CHARTERED ACCOUNTANT

91 Points Posted on 09 December 2008

If a contractor gives a work on a sub contarct to a sub contractor, and a contractor hires a truck for carriage of goods / material to or from sub contractor. Will the activity of hiring trucks would cover as seperate contract or is covered as a sub-contarct?

Replies (4)

Guest

460755 Points Posted on 09 December 2008

HIring of vehicle will be seperate contract and will cover under sec 194c.

the point is disputable one, hence for safer side to comply sec 40 b TDS to be made.

CA CHINTAN AJMERA

Chartered Accountant

2987 Points Posted on 09 December 2008

Yes i think it is treated as seperate contract.

RAJU

LEARNER

1089 Points Posted on 09 December 2008

Dear Sir,

I am not sure whether I can clarify you but would like to put my views on the matter. Hope the query is in connection with deduction of tax at source U/s.194C. If hiring of vehicles is a primary contract which in turn is sub-contracted, it is a sub-contract. In present case hiring of vehicles is ancilliary to the main object. Hence, I think it will be a separate contract and not a sub-contract.

Rgds/Dharmaraju

Pavan Jain S

Chartered Accountant

1575 Points Posted on 10 December 2008

The Contractor has entered into a contract with other subcontractor for hiring of vehicles. It is a separate sub contract on the following grounds:

· the main contractor has hired vehicles for carriage of goods to sub contractor

· the transportation of goods to and from sub contractor is wholly or partly in pursuance of main contract.

In such cases, no TDS u/s 194C has to be deducted if the sub contractor hiring the vehicles is Resident and do not own more than 2 goods carriages at any time during the PY and he submits a declaration in Form 15I. In any other case, TDS has to be made.

This reply is in accordance with my understanding of the query