Tds u/s 194c - is the definition of work exclusive?

Vivek Agrawal (GST Practitioner) (181 Points)

27 September 2017  

A contractor executes the work of constructing  Electric substation on turnkey basis i.e. contractor shall supply material, carry out the erection work and finally do the commissioning of substation.

Now my question is

Question 1 - Whether TDS is liable to be deducted from this contractor's payment ?.

Question 2- If Q 1 is Yes... then whether TDS shall be deducted on only erection and commissioning part and not on supply part or on whole contract? 

In my opinion, such contract is not convered under the definition of "work" u/s 194C. Hence no TDS is to beducted from contractors payment

The definition of "work" as per section 194 C is as under—

  1. advertising;
  2. broadcasting and telecasting including production of programmes for such broadcasting or telecasting;
  3. carriage of goods or passengers by any mode of trans­port other than by railways;
  4. catering;
  5.  manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from such customer, but does not include manufacturing or supplying a product accord­ing to the requirement or specification of a customer by using material purchased from a person, other than such customer.’