Difference between Service Tax & TDS

This query is : Resolved 

29 May 2010

Dear Experts,
Please explain me, what is Service Tax & TDS. I know service tax is 10.3% and what is the TDS percentage for services.

When we are raising invoice for services, we are charging 10.3% service tax from the customer. But customer are deducting TDS(Don't know how many %) and paying some amount. They are not paying service tax also. Hence please explain, if customers provide us TDS certificate, then they don't need to pay Service tax & TDS?

Kindly clarify.

Shyam Lal Naik (Expert)
29 May 2010

The rate of TDS differs for different types of services. For contract for carrying out any work, it is 1 or 2%, For professional or Technical Fee, it is 10%, for commission or Brokerage, it is 5% etc.

There is no provision for withholding Service Tax. Your customers are supposed to pay it.

So far TDS is concerned, your customers shall issue TDS certificates in liue of the payment.

Deepak Goel (Expert)
29 May 2010

If you are providing Technical services then customer will deduct TDS @ 10% or if you are raising maintenance contract invoice then customer will deduct TDS @ 2%

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