Applicability of TDS

[PRADEEP KUMAR]

We have received one Invoice wherein description on bill mentioned as:- ERP Software Solution (Total Cost with Implementing & Training Warantee for one year) amounting to Rs. 8.25 Lakhs. Vendor has charged VAT & 5% on Invoice amount. Pls. let us know whether we should deduct TDS or not on this invoice.

AI Summary

TDS Applicability on ERP Software Invoice: Check If It's a Sale or Service for Correct Tax Deduction A query was raised regarding the applicability of Tax Deducted at Source (TDS) on an invoice for an ERP Software Solution, which included implementation, training, and a one-year warranty, totaling Rs. 8.25 Lakhs. VAT and 5% were charged on the invoice. The response clarified that TDS is not applicable if it is a sale of goods. However, if the transaction involves professional or technical services, TDS should be deducted. It was advised to review the terms of the agreement or transaction details to determine the correct application.