TDS related query

Dear Sir 

I have come across this problem with the supplier of gas in my co. We have entered into contract with him for supply of gas and contract price includes transmission charges. But the party has bifurcated the gas charges and transmission charges in the bill and levied service tax on transmission charges. My query is whether we should deduct tds on transmission charges.

Replies (4)

From the facts, the entire payment from your prespective is cost pf purchase. This being a purchase transaction, TDS is not applicable.

Method of billing by the vendor does not alter the substance of the contract.

hello,


No if the amount is separated than you dont need to do it. For better clarification wait for others reply....

also ask the contractor to issue separate billls.

if the amount of transmission charegs is showing separated in bill then u have no need to deduct tds bcoz this will not form part of contract price. 

Similar issue has been answered at the Expert Section at : /experts/tds-on-freight-charges-of-purchases-383155.asp

 

The only reason for the vendor showing the transmission charge separately is that, transimission through pipeline is a taxable service under Service Tax laws.

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