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TDS on Works Contract Tax

Sriguru Started The Discussion:

Dear Members,

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 Sriguru, First clarify me a point, whether you have raised a purchase order or a contract agreement for the work done? Regards, Kumar.H. +91-9789997642

Sriguru - 
Dear Mr.Kumar, We have raised Purchase order. There is no contractual agreement for the said work. Regards Sriguru

Dear Sriguru,

When there is a transfer of title of goods, it amounts to sale. Hen ce, no contractual obligation on the part of buyer to deduct tax at source as you ordered to supply the goods and he has supplied the same as per your specifications.

Regards,
Muniswamy Nayuak badrappa

Dear Siriguru, As per your statement, its purely a state of purchase and not a service done to you. So there is not need of deducting TDS. Regards, Kumar.H

rsuresh83 - 
Hi Why it has raise Purchase Order? i think it’s not necessary With Regards Suresh R Bangalore rsuresh83@hotmail.com

can any one tell me the TDS rates for all diff kinds of descriptions.. regards vidya vidyagangolli@gmail.com

Shravan75 - 
Hi,

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.

Thanks
Shravan Arya

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