TaxTMI 
TaxTMI 
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?
Calculation of tax
25 Apr 2008 
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Works Contract TDS must be deducted on full contract value; material-labour split not recognised for TDS.
Payments for a works contract are treated as a single composite taxable transaction for TDS under TNVAT; tax must be deducted on the full amount paid for the works contract. There is no provision permitting exclusion of a separately stated labour portion from TDS, nor is there authority to apply a presumptive material/labour split to reduce the TDS base. (AI Summary)
Payments for a works contract are treated as a single composite taxable transaction for TDS under TNVAT; tax must be deducted on the full amount paid for the works contract. There is no provision permitting exclusion of a separately stated labour portion from TDS, nor is there authority to apply a presumptive material/labour split to reduce the TDS base. (AI Summary)