TaxTMI 
TaxTMI 
I WANT TO KNOW ABOUT TDS APLICABLE U/S 194C ON OFFICE FURNITURE WITH INTERIOR DECORATION WITH MATERIAL CONTRACT. AND CONTRACTOR ISSUE BILL WITH VAT 8% AND SERVICE TAX 4.944% IT IS PROPER?
TDS U/S 194C
12 May 2015 
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TDS on contracts: withhold on contract value excluding service tax; works contract reverse-charge alters service tax levy.
TDS must be deducted on the contract value excluding service tax, with different withholding rates for individual/HUF payers and other payers. VAT may be correct if the contractor is under a composition scheme. Contracts for furniture and interior decoration incorporating materials are treated as works contract service and, where applicable, service tax is subject to the reverse charge mechanism; the contractor's invoiced service tax may therefore be excessive. Refer to Notification no.30/2012-Service Tax for the applicable allocation under works contracts. (AI Summary)
TDS must be deducted on the contract value excluding service tax, with different withholding rates for individual/HUF payers and other payers. VAT may be correct if the contractor is under a composition scheme. Contracts for furniture and interior decoration incorporating materials are treated as works contract service and, where applicable, service tax is subject to the reverse charge mechanism; the contractor's invoiced service tax may therefore be excessive. Refer to Notification no.30/2012-Service Tax for the applicable allocation under works contracts. (AI Summary)