194 c
Roshan Kumar
(Querist) 19 April 2013
This query is : Resolved
Whether there is any obligation to deduct tds on contract of material supply?
please give suggestion with section as early as possible.
Arjunsingh Saoji
(Expert) 20 April 2013
There is no dispute that works contract (including job work) are covered within the scope of section 194C of the Act. But there has always been disputes between the tax payers and the department whether a particular contract is a works contract or contract of sale.
The major controversy between the tax payers and the department throughout had centered round the interpretation of the expression “carrying out any work (including supply of labour for carrying
out any work)”.
Mere passing of property in an article or commodity during the course of the performance of the transaction in question does not render it a transaction of sale. For, even in a contract purely of work or service, it is possible that articles
may have to be used by the person executing the work and property in such articles or materials may pass to the other party. That would not necessarily convert the contract into one of sale of those materials. In every case the court would have to find out what was the primary object of the transaction and the intention of the parties while entering into it.
