Let me start with the help of suitable examples.
Example 1: M/s X Pvt Ltd(PUB&Restaurants)
receiving the services from Y Ltd (Consultancy for designing the creatives such
as Posters and Flexi etc. for advertising the Events.
Ref: As
per Section 194J of the Income Tax Act, TDS is to be deducted @ 10% on
any amount paid to any resident as, Fees for professional services, Fees for technical services, Royalty, or Any sum referred to in Section 28.Hence X Ltd is liable, to deduct the TDS deduction under section 194J.
Example 2: Jaya TV, is a TV channel telecasting advertisements for Colgate Toothpaste on their TV channel.
- Here Colgate company was in agreement with JAYA TV for getting telecast the Colgate Adds in Jaya TV for an agreed period at the agreed price at predetermined price and times.
- If you look into Section 194C, the Colgate company shall deduct the TDS under section 194C.
- Section 194C states that "any person responsible for paying any sum to the resident contractor for carrying out any work (including supply of labor)"
" What is the meaning of work for the purpose of Section 194C?
The expression “work” in this section would include-
advertising;
broadcasting and telecasting including
production of programs for such
broadcasting or telecasting;
carriage of goods and passengers by any mode of transportation,
other than railways;
catering;
Manufacturing or supplying of a product according to the requirement or
specification of a customer by using the materials purchased from such customer,
But does not include manufacturing or supplying a product according to the requirements or specifications of a customer by using the materials purchased from a person, other than such a customer.
Conclusion: Based on the above examples, we need to decide the case to case the applicability of 194J and 194 C by evaluating the nature of the service.
Thanks & Regards
Team GST Mithra
