TDS u/s 194C or 194J

[Shyam Naik]

Sir, We have entered into a contract with M/s. Volvo India Limited, for repairing and maintenance of our vehicles. M/s. Volvo India deputes there supervisiors to routine checking and carryout the necessary repairing etc. The are paid fixed monthly sum. The bill read as fee for technical supervisior. Whether section 194C/194J is attracted. Kindly opine.

[Surender Gupta]

As I understand from your query, Volvo India Limited (VIL) is undertaking the repairing and maintenance service and some supervisors have been hired by the VIL to supervise the activities of repairing. In this case you have to see whether the contract is separate or composite. Where the contract is composite, how VIL is allowed to raise invoice for technical services in such manner? Therefore, all is dependent on nature of contract and agreement. But taking the example of raising invoice for technical services as independent service, I am of the view that TDS should be deducted under section 194J and not u/s 194C on such amount.

AI Summary

TDS classification for supervisory charges: treat genuinely billed technical supervision as fees for technical services requiring withholding. Whether withholding tax applies under the contract-for-work provision or as fees for technical services depends on whether supervisory charges are invoiced and rendered as an independent technical service; if they are genuinely separate, treat them as fees for technical services subject to withholding, but if integral to the works contract they should be characterised and withheld under the contract-for-work treatment.