I have engaged into a contract with an agency to supply manpower to me. The agency charges me "minimum wages + ESI + EPF + Service Tax+His Services charges". However when I apply TDS @2% while releasing the payments to the agency, the effective payments become 98% of "minimum wages + ESI + EPF + Service Tax+His Services charges". However, in such a situation, the effective payments become less than "minimum wages + ESI + EPF+Service Tax", making the total payments violative of the "minimum wages+ESI+EPF+Service Tax". Kindly advise whether I can do the TDS? If I have to do TDS, do I have to ensure that Agency's service charges are such that even after TDS @2% the effective payments are greater than "minimum wages+ESI+EPF+Service Tax", thus permitting the agency to realise some service charge greater than zero. It is also understood that a zero service charge to the agency would make the contract invalid. It is also to mention that the contract had been finalised after due tendering. Hence, what should I mention in the tender document to implement the desirable provisions.