Latest Expert Exchange Queries

GST Demo Service software link:
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Popular Search: TDS :: ACCOUNTING STANDARD :: TAX RATES - GOODS TAXABLE @ 4% :: VAT Audit :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: ACCOUNTING STANDARDS :: VAT RATES :: ARTICLES ON INPUT TAX CREDIT IN VAT :: cpt :: Central Excise rule to resale the machines to a new company :: due date for vat payment :: empanelment :: list of goods taxed at 4% :: form 3cd :: articles on VAT and GST in India
« From the Courts »
 Samvardhana Motherson International Ltd. (Formerly Known As(M/s Samvardhana Motherson Finance Ltd.)a Vs. Assitant Commissioner Of Income Tax, Circle 22(1) & Anr.
 Pr. Commissioner Of Income Tax (Central)-2 Vs. M/s Frontline Business Solutions Pvt. Ltd. & Ors.
 Ram Kumar Vs. Income Tax Officer, Ward-64(2) & Anr.
 Principal Commissioner Of Income Tax-8 Vs. St Microelectronics Private Ltd.
  The Chamber Of Tax Consultants vs. UOI (Delhi High Court)
 M/s Ess Distribution (Mauritius) S.N.C.Et Compagnie Vs. Assistant Commissioner Of Income Tax, Circle -1(2)(2) International Taxation, New Delhi
 Commissioner Of Income Tax (Ltu) Vs. ESPN Software India Ltd.
 Bses Rajdhani Power Ltd. Vs. Principal Commissioner Of Income Tax,
 ITO vs. Gymkhana Club (ITAT Chandigarh)
 SRD Nutrients Private Limited vs. CCE (Supreme Court)
 The Commissioner Of Income Tax-Exemption Vs. The Fertilizers Association Of India

Applicability of TDS on contract for fabrication of article or thing - Clarification
December, 21st 2006

Direct Tax Circular No. 13 dated 13 December 2006

Applicability of TDS on contract for fabrication of article or thing - Clarification 

The CBDT, in response to a clarification sought on the applicability of s.194C of the Income Tax Act 1961 on transactions, where the assessee had outsourced certain work relating to fabrication or manufacturing of an article or a thing in accordance with the assessees specifications, clarified that s.194C of the Act would be applicable in respect of a contract for supply of any article or a thing as per the prescribed specifications only if it was a contract for work, and not a contract for sale, as laid down in Circular No. 681 dated 08 March 1994.

Applicability of TDS provisions of section 194C on Contract for Fabrication of Article or Thing as per Specifications given by the Assessee - Contradiction between Two Circulars of CBDT - Resolution thereof - reg.- Co

Representations have been received in the Board seeking clarification on the applicability of section 194C on such transactions, where the assessee has outsourced certain work relating to fabrication or manufacturing of article or thing in accordance with the specifications given by the assessee. Circular No. 681 dated 8.3.94 of the Board clarifies in Para 7(vi) that the provisions of section 194C would not apply to contracts for sale of goods and further clarifies that where the property in the article or thing so fabricated passes from the fabricator-contractor to the assessee only after such article or thing is delivered to the assessee, such contract would be a contract for sale and so outside the purview of the section 194C. However, in reply to question No. 15 in Circular No. 715 dated 8.8.95 on the subject of applicability of Section 194C, in respect of contract for supply printed material as per prescribed specifications, it has been said that such contracts would also be covered under Section 194C. It has been represented that the views expressed in these two Circulars, to the extent as pointed out above, are in contradiction to each other.

2. The matter has been examined by the Board and it is considered that exclusive reliance on Question/Answer No. 15 of Circular No. 715, without taking into account the principles laid down in Circular No. 681 is not justified. Before taking a decision on the applicability of TDS under section 194C on a contract, it would have to be examined whether the contract in question is a .contract for work. or a 'contract for sale' and TDS shall be applicable only where it is a 'contract for work'.

3. It is, therefore, clarified that the provisions of section 194C would apply in respect of a contract for supply of any article or thing as per prescribed specifications only if it is a contract for work and not a contract for sale as per the principles in this regard laid down in para 7(vi) of Circular No. 681 dated 8.3.1994.

Anand Jha
Director (Budget)

F.No.275/75/2004-IT (B)
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
New Delhi

Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Integrated Software Solutions Integrated Software Development Integrated Software Services Integrated Software Solutions India Integrated Softw

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions