About srvice tax on rent

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This query is : Resolved

aman (Querist)

14 September 2013 IS SERVICE TAX IS APPLICABLE ON RENT??IF YES THEN TDS IS DEDUCTED ON WHAT AMOUNT( WHEATHER INCLUDING SEVICE TAX AMOUNT OR EXCLUDING ).

CA Kintal Shah

CA Kintal Shah (Expert)

14 September 2013 In my opinion, TDS should be deducted excluding ST amount. i.e. on basic bill amount.

My View:
TDS is deducted on an payment made to Service provider where Service provider has made profit. TDS is nothing but a form of Income Tax which is deducted by service receiver.

ST is charged in invoice which is as per Law. It is an obligation on Service provider to charge, collect and pay into Govt treasuries. Hence there is NO QUESTION of any PROFIT being made on SERVICE TAX amount.

Also if payer deducts TDS on Service Tax portion, then service provider will still have to pay full amount into givernment. Hence it leads to unnecessary working capital burden on service provider.

There are some professional suggesting TDS to be deducted including ST amount.

Ganeshbabu K

Ganeshbabu K (Expert)

14 September 2013 tds to be deducted excluding service tax refer my file as below for more detailed explanation with relevant notifications

https://www.caclubindia.com/share_files/tds-on-service-tax-on-all-payments-except-rent-56695.asp#.UjSY9canrDU

Mohan Babu.L

Mohan Babu.L (Expert)

16 September 2013 Hi Aman,
TDS on rent should be deducted excluding service tax.
For instance,
Rent/month 20,000.00
Service Tax @ 12.36% 2,472.00
22,472.00
TDS @ 10% 2,000.00
20,472.00
Note:Threshold total payment during the year is Rs.1,80,000/-
Good Luck....

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