We pay courier charges on Documents exported. Service tax is charged in bill separately but we account that service tax in expense. E.g. Expense - 100 Service Tax 12.36 Invoice value 112.36
It means we book below entry Postage expe 112.36 To A/P 112.36. Now is TDS to be deducted on 100 or 112.36.
25 July 2014
TDS to be deducted on amount excluding service tax. The CBDT has issued Circular No. 1/2014 dated 13.01.2014 pointing out that the Rajasthan High Court has taken the view in CIT(TDS) vs. Rajashthan Urban Infrastructure that if as per the terms of the agreement between the payer and the payee, the amount of service-tax is to be paid separately and was not included in the fees for professional services or technical services, no TDS is required to be made on the service-tax component u/s 194J of the Act. Pursuant thereto, the CBDT has decided in exercise of powers u/s 119 that wherever the terms of the agreement/ contract between the payer and the payee, the service tax component comprised in the amount is indicated separately, tax shall be deducted at source under Chapter XVII-B of the Act on the amount paid/payable without including such service tax component. Complete notification may be seen from below link--
CAclubindia
