How to calculate Service tax when TDS deducted

This query is : Resolved

KIYOSH MEWADA (Querist)
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31 March 2009 Please guide me how to calculate Service tax liability.

We have raised bills to our one of the customer. They give on account payment against our various bills during the year & at the year end i.e. 31st march, they debit our account for TDS. We comes to know TDS amount only in the month of April OR May when we reconcile ledger with them.

Shall I pay service tax only on Cheque amount & ignore service tax on TDS deducted & debited to our Account.

Dayal

Dayal (Expert)
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31 March 2009 Absolutely incorrect to deduct TDS from the taxable amount.

Service tax is payable on the gross amount charged to the client.

The TDS deducted is not to be construed as payment not received as you shall be served with the TDS certificate.

Therefore service tax payable on amount of invoice raised by you i.e. payment received plus the TDS deducted.

KIYOSH MEWADA

KIYOSH MEWADA (Querist)
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02 April 2009 Please also guide me as I don't know how much TDS deducted by party. I comes to know TDS amount only after 31st March, than how to calculate service tax.

Madhukar N Hiregange

Madhukar N Hiregange (Expert)
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03 April 2009 In my view the TDS deducted is presumably paid to the central government and should be considered as a payment made to you albeit indirectly.

In the event that at the time of receipt you are not aware whether TDS has been deducted / what amount then it would be open to pay the ST on the amount received ( worked out backwards) and when the informatioin is received then pay the addtional ST. This may or may not be accepted by department however.

KIYOSH MEWADA

KIYOSH MEWADA (Querist)
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04 April 2009 Thank you very much.

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