Tax Deduction at Source

[Pradeep Kaushik]

Respected Sir,

 

We are an excisable goods manufecturing comapny. Out of our 5 suppliers, there is one suppllier to whom we are selling the Raw Material. He is adding some more parts to our material and selling back to us. (Excise and VAT is being charged by both of us on sale Invoice).  we are deducting the TDS on his invoice value, under contract ( TDS U/s 194C).

 

Now the suppliers is arguing with us for non duduction of TDS U/s 194C. He is saying that this is simple sale & purchase transection between us. He is not accepting our deductions.

 

Please send us the clearification, so that we can make our suppliers satisfied in this issue.

 

Best Regards.

 

Pradeep Kaushik

[PAWAN KUMAR SHARMA]

There cannot be any TDS on Sales & Supplies. Once a supplier raised a Tax Invoice and charged VAT/CST no TDS would be deducted.

[Guest]

In the given case TDS is deductible U/s194C. Attention is invited to Clause (iv)(e) of Explanation to Section 194C according to which "Work shall include-- (e) manufacturing or supplying of product according to the requirement or specification of a customer by using material purchased from such customer, but does not include manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from from a person ,other than such customer."

Further, non deduction of TDS may attract disallowance u/s 40(a)(ia).

[r.rajkumar kumar]

tds cannot be deducted when y are raising invoice with duty and local tax and he developed and send

back to y which the a new shape alongwth duty invoice and local tax . Than this comes under sale of goods hence no tds is reqired.

AI Summary

Dispute Over TDS Deduction: Manufacturing Company vs. Supplier Under Section 194C on Sale vs. Contractual Work A manufacturing company is facing a dispute with a supplier over the deduction of Tax Deducted at Source (TDS) under Section 194C. The company sells raw materials to the supplier, who adds parts and sells them back. The company deducts TDS on these transactions, considering them contractual work. The supplier argues it is a simple sale and purchase, thus no TDS should be deducted. Responses vary: one states TDS is not applicable on sales with VAT/CST invoices, another supports TDS deduction under Section 194C, while a third agrees with the supplier, considering it a sale of goods.