TDS u/s 194-I on VAT/CST

Hi . in my opinion section 194I is equally applicable to lease as well sub-lease agreements and as per circular no. 4/2008 , no TDS is to to be deducted on service tax portion , so no tds will be deducted in case of lease agreements too . However there is no such circular or clarification on vat /cst and also i have practically seen that tds have been deducted on vat /cst portion in case of work contracts .

So, u mean to say that TDS is to be deducted on VAT/CST Component.

1) As per the circular no. 04/2008 issued by the CBDT it is not required to deduct tds on service tax component on rent.

such circular is not talking about the VAT/CST component. Therefore you have to deduct tds on VAT/CST component on such rent.

As per explanation 2 to section 9(1) vi (iva) royalty means consideraion including any lumpsum consideration) for the use or right to use any industrial, commercial, or scientific equipment......

Will the above definition of royalty will be applicable for Section 194 J where TDS on Royalty to be deducted.

If yes then agreement of any machinery where right to use is transferred then Sec 194 J will be applicable or 194 I (Hiring).