vat and tds

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  1. nehal koradia

    nehal koradia New Member

    HI All.....
    m question is as below....kindl reply .......

    A a person who is receiver of service and B is the person providing service. B has issued bill amounting Rs.15000.This bill includes both i.e, material components as well as labour components.
    Also B has charged vat on the whole bill amount. Now my question is whether tds is applicable or not?And if yes is it on bill amount only or also on vat?
     
  2. Surendracak

    Surendracak New Member

    Hi Nehal,
    I answer your question in two ways..
    i. If the vendor clearly identify and mention the amount for material and labour separately in the bill, there is no TDS on material, you need to deduct Tds on service element( subject to Income tax rules).
    ii. If the vendor is mention single amount in the bill (even though it includes material) Tds is applicable on full amount, because any material is used during the course of providing service that deemed to be include in the value of the service.

    I hope you got the answer..
    best of luck..

    CA Surendra.
     
  3. nehal koradia

    nehal koradia New Member

    ok....but vendor has also charged vat on the full amount (material+labour).is tds applicable?i have asked many CAs .thay told me not to deduct tds.
     
  4. Puran Singh

    Puran Singh New Member

    thank u Surendracak
     
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