Sriguru Started The Discussion:
I would like to get clarifications in the following transactions whether
1.the transaction will attract Works contract Tax
2.if so wat is the rate of tax
3.if vendor is deducting VAT then what is the effect of WCT
4.if the work is done against Purchase order as per specification required by the contractee whether the vendor is falling under 194C as a contractor for deducting TDS.
The case is
We have raised an order for printing of Poster papers to a Private ltd company.
On the basis of the puchase order and as per the specification mentioned in that order, we have received the posters.
Now the vendor has raised bill for the work he completed and also charged VAT @ 4% on the total work value.
We have paid the vendor without deducting TDS.
To my knowledge,
if the work is taken as WCT,say WCT attracts, then in our case the vendor has charged VAT hence no need to collect WCT from his payment.
In over view, it is a sale in hands of the vendor and purchase to the receiver and hence no question of TDS raise.
In another view,it is like job work and the vendor falls under the definition of "Contractor" as per IT Act and hence TDS to be deducted.
Note:All the materials were used by the Vendor on his own
What is your view in this regard?
Pls clarify me as soon as possible.
Dear Mr.Kumar, We have raised Purchase order. There is no contractual agreement for the said work. Regards Sriguru
Rate of TDS for contractor is 2% + 3% education cess = 2.06% (No TDS will be deducted if annual bill is less than 50000/- or single bill is less than 20000/-)
for Advertising contract 1 + 3 = 1.03%
for professional fees 10 + 3 = 10.30 (No TDS if annual bill is less than 20000/-)
for Rent 15 + 3 = 15.45% (for individual) & 20 + 3 = 20.60% (for company) (No TDS if annual rent is less than 120000/-)
for Commisison/Brokerage 10 + 3 = 10.30% (Limit 2500/-)
for Interest 10 + 3 = 10.30% (Limit 5000/-)
TDS on salary as per income tax slab.
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