Service Tax in invoice

This query is : Resolved

umesh (Querist)
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14 January 2011 Friends,

Should we as a company be charging service tax for customized software development for a client of ours?

And is our client entitled to deduct TDS @ 10% on our invoice amount?

We were shocked to discover a cheque of only 90K against our invoice of 100K
Is there any way of recovering that money?

Thanks

Pradeep Kamath

Pradeep Kamath (Expert)
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14 January 2011 1. Software development falls under the category information technology software services under section 65 (105) (zzzze) of FA 1994. So u have to charge service tax.
2. TDS is attracted under s.194J of Income tax Act. So TDS has to be made by your client.

You need not be shocked. Get the TDS certificate from your client for the deduction and set this off against your income tax liability.