Our company has sending the material worth Rs.20.00 to jobworker for further processing on payment of duty. Jobworker purchased a material from his vendor and fix it into material which was sent by us. Vendor has charging in the invoice is as follows.
Finished material 100.00
Excise Duty 10% (Rs.20+Rs.100) 12.00
VAT 5% 5.60
Total invoice value 117.60
On what amount we should deduct tax at source?
Please help me...
TDS Not Applicable on Job Work with Materials Under Section 194C: Transaction Considered Sale, Not Service Contract A company inquires about the applicability of Tax Deducted at Source (TDS) under section 194C for materials sent to a job worker for further processing. The job worker integrates additional materials and charges include excise duty and VAT. Three responses suggest that TDS is not applicable as the transaction is considered a sale of goods, not a service contract. The first response clarifies that since excise and VAT are collected, it constitutes the manufacture of a new product. The second response questions the relevance of excise in job work, while the third treats the transaction as a customized sale. (AI Summary)
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