Calculation of tax

[Guest]

My Comapny is registered under TNVAT Act.We are engaging contractors to do some civil/Electrical works in our Company.They are giving bills charging TNVAT,Service Tax. In some bills material portion, Labour portion is given separately.In some bills there is no separate figures. My issue is whether TNVAT TDS is to be made only on the material portion only.whether we can apply 70/30 formula if material portion is not given separately for calculating the material portion. Presently we calculating TNVAT TDS on material portion(Excluding TNVAT) only.If no separate figure available we apply 70/30 formula for finding material value. Whether this procedure is correct?

AI Summary

Clarification Issued: TNVAT TDS Must Be Deducted from Entire Contract Amount, Including Labor and Materials. No 70/30 Split. A company registered under the TNVAT Act inquires about the correct procedure for calculating TNVAT TDS on civil and electrical works contracts. The issue arises when bills include both material and labor costs, sometimes without separate figures. The company currently deducts TDS on the material portion only, using a 70/30 formula when figures are not provided. The response clarifies that under the TNVAT Act, TDS should be deducted from the entire contract amount, including both supply and labor, without applying the 70/30 formula, as there is no provision to separate the labor portion for TDS purposes.