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Supreme Court seeks reply from Samsung India on TDS

business Updated: Aug 04, 2009 12:40 IST

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The Supreme Court has sought a reply from Samsung India Electronics on the I-T department plea that the firm is liable to deduct tax in respect of goods outsourced for manufacturing.

The issue has been raised by the income-tax department saying that consumer electronics and home appliances manufacturer Samsung India Electronics Ltd is liable to deduct tax in respect of goods outsourced for manufacturing to other manufacturers or original equipment manufacturers (OEMs).

A Bench headed by Justice S H Kapadia has sought reply from Samsung on this.
Challenging the Delhi High Court judgment that dismissed its plea, the I-T department said that the contracts for manufacturing products bearing the company's trademark are not sale deals but agreements for carrying out work.

It further said that under Section 194-C of the Income-Tax Act, 1961, tax should be deducted on such Contracts.

Relying on the apex court's decisions in various cases, Additional Solicitor General Gourab Bannerjee said that in a works or service contract, the person performing or rendering the service has no property in what has been produced, notwithstanding the fact that part or even the whole of the material used by him might be his property.

The Supreme Court has sought a reply from Samsung India Electronics on the I-T department plea that the firm is liable to deduct tax in respect of goods outsourced for manufacturing.

The issue has been raised by the income-tax department saying that consumer electronics and home appliances manufacturer Samsung India Electronics Ltd is liable to deduct tax in respect of goods outsourced for manufacturing to other manufacturers or original equipment manufacturers (OEMs).

A Bench headed by Justice S H Kapadia has sought reply from Samsung on this.

Challenging the Delhi High Court judgment that dismissed its plea, the I-T department said that the contracts for
manufacturing products bearing the company's trademark are not sale deals but agreements for carrying out work.

It further said that under Section 194-C of the Income-Tax Act, 1961, tax should be deducted on such Contracts.

Relying on the apex court's decisions in various cases, Additional Solicitor General Gourab Bannerjee said that in a works or service contract, the person performing or rendering the service has no property in what has been produced, notwithstanding the fact that part or even the whole of the material used by him might be his property.