TaxTMI 
TaxTMI 
a vehicle maintenance company which services vehicles and also supplies parts to customers some customers are deducting tax u/s 194c on the entire invoice value the vehicle maintenance company contends that tds should be only on labour portion and not on supply pls give your views
Applicability of TDS
17 Jul 2009 
1 Reply 
9752 Views Asked by
TDS on contract payments extends to gross invoice when materials are supplied as part of service, not just labour.
The query concerns whether TDS on contract payments should be limited to the labour/service component or extend to the entire invoice when materials are supplied. If service and sale contracts are independent, TDS attaches only to the service portion. If the supply of materials is integrated into the service (a works contract or combined contract), TDS should be deducted on the gross invoice amount, including material value, because the materials are used by the service provider in rendering the service. (AI Summary)
The query concerns whether TDS on contract payments should be limited to the labour/service component or extend to the entire invoice when materials are supplied. If service and sale contracts are independent, TDS attaches only to the service portion. If the supply of materials is integrated into the service (a works contract or combined contract), TDS should be deducted on the gross invoice amount, including material value, because the materials are used by the service provider in rendering the service. (AI Summary)