Tds for purchase order
aditya unchal
(Querist) 28 June 2014
This query is : Resolved
Sir,
I am working in a government department. We collect quotation from different vendors for purchase of items and issue a purchase order for lowest quoted vendor. We will not supply any raw materials to him. He sends the goods as per our requirement and submits a bill including VAT. Now, while making payment whether we have to deduct TDS? If yes, under which section and what is the TDS rate? Please clarify.
Thank you.
Sankaranarayanan
(Expert) 28 June 2014
For supply of materials the detection of TDS not required. If any contract involvement then tds should detected to the appropriate section
R.K Nanda
(Expert) 28 June 2014
consult tax lawyer.
Anirudh
(Expert) 28 June 2014
From your query it appears that you are only purchasing the goods from the vendor and making payment towards the supply of the goods ordered by you. Therefore, in the given fact situation, there is no need to effect tax deduction at source (TDS).
Guest
(Expert) 29 June 2014
Mr. Aditya,
You seem to have made a mix-up of two different issues, (1) billing of VAT by the supplier on the purchases made by your office, and (2) TDS from a contractor on the payment of bills for the contract. While VAT has to be recovered from the purchaser by the suplier, TDS has to be deducted by the DDO of your office, as based on the total contract amount.
Moreover, there is also a difference between quotations for supply of material in small quantities and award of contract for supply of material after following the prescribed tendering process.
So, better clarify your position, whether your question pertains to VAT or Income Tax to be deducted from the contractor on contractual supply of materials.
aditya unchal
(Querist) 29 June 2014
Sir,
I think i have failed to explain the situation. My question pertains to deduction of TDS while making the payment to the supplier. Section 194C does not apply for supply of goods. But we have deducted TDS of 2%. No supplier objected till date. But now a supplier is asking as per which section you are deducting TDS. I found that there is no TDS for supply of goods. I want to clarify this point only.
Thank you all for your valuable answer.
Guest
(Expert) 29 June 2014
You are still far away from proper clarification. The question is whether the supply of material is under regular tender and contract system or just as casual purchases on quotation basis?
aditya unchal
(Querist) 29 June 2014
Sir,
There are two situations :
1.casual purchases on quotation basis
2.supply of material is under regular tender and contract system
I think for both TDS is not applicable under sec.194C. For both we are not supplying any raw materials. The supplier supplies the goods as per our specification.
Plaese sir,now, can you clarify these two issues?
Thank you very much for spending your precious time to answer my query.
Guest
(Expert) 29 June 2014
1) Casual purchases on quotation basis would not attract any TDS.
2) In contract system TDS has to be deducted on payments to contractor if the amounts paid or credited during the financial year exceeds Rs.75,000/-.
Anirudh
(Expert) 29 June 2014
Supply of goods remains supply of goods whether on casual basis or on a protracted basis under a contract.
Supply of goods simplicitor does not at all attract TDS.
It is only the payments, if any, made to the contractor towards works if any carried out by the contractor would attract TDS.
T. Kalaiselvan, Advocate
(Expert) 30 June 2014
You are advised to consult your department tax experts or an auditor by the experts so that the prevailing issue which is not a new and unsolvable issue, can be solved with the experienced advise of some senior staff from your department.
