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Tds

Vidhya Chandran J (CA Article) (93 Points)

01 March 2016

A bill including materials valuu, installation charges and service tax. So TDS applicable for entire bill amount. Contract in the nature of sale & supply. This rule is correct or not. If correct please mention the rule number.

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4 Replies

Susmita Dutta, CA , CPA (CA ) (2141 Points)
Replied 01 March 2016

TDS should be deducted from the amount exclusive of service tax.

As service tax is not an income of the service provider ,the service provider is merely acting as an agent for collecting the service tax from the service receiver and depositing the amount with the Govt.

Vidhya Chandran J (CA Article) (93 Points)
Replied 01 March 2016

Thank You.

Sir please mention rule or Section number.

Susmita Dutta, CA , CPA (CA ) (2141 Points)
Replied 01 March 2016

Attention of CBDT has also been drawn to the judgement of the Hon’ble Rajasthan High Court dated 01.07.2013, in the case of CIT(TDS) Jaipur vs Rajasthan Urban Infrastructure (Income-tax Appeal No.235, 222, 238 and 239/2011), holding 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.