Our organisation engages labour supply contractors for getting the specified job done.
They engage contract labour & at the end of the month the contractor raise bills which includes wages payable to the contract labour deployed by them, Contractors commission, applicable service tax.
TDS is deducted on bill amount & deposited to govt.
When contracted employee retires or resign the company credits the gratuity amount to contractor & issues cheque by debiting to contractor account. Contractor pays the gratuity to that retired/resigned employee out of the fund received from our organisation. Gratuity amount is less than Rs. 10 Lakh. No commission is paid to Contractor for such transaction.
My Question is :
1) Whether crediting the gratuity amount to Contractor in such case attracts TDS u/s 194C ?
