PO with installation (free of cost) -is liable for TDS u/s-194C

[Asked by Guest]

 

Dear Sirs,

Our company is going to issue a Purchase order for sprinkler Irrigation system in this system includes pipe, pump, fittings etc. Installation is in scope of the supplier & it is free of cost.

My question is that if co. is issuing Purchase order with installation (free of cost). Is there any liability for deduction of TDS u/s-194C

Thanks

[DR.MARIAPPAN GOVINDARAJAN]

Whether you have got clarified in this issue? If not please inform.

[Umayal Palaniappan]

194C obligates the deductor for TDS at the time of recording the expenditure in the books or making the payment which ever is earlier.

However, in the case of free of cost supplies there will be no amount paid or payable therefore there is no question of deduction of TDS on the same.

k.srini

AI Summary

TDS under section 194C: no deduction required where installation is supplied free and no amount is payable.
The obligation to deduct tax arises when expenditure is recorded or payment is made, whichever is earlier. If installation is supplied free of cost and there is no amount paid or payable for that installation, there is no taxable sum for the purposes of contractor withholding and therefore no TDS deduction is required on the free-of-cost installation component.