Service Tax on Sale Commission paid

This query is : Resolved

Angayarkanni Murugesan (Querist)
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12 June 2009 Sirs,

when deducting TDS on the sales commission payable to an agent, whether gross amount including service tax paid to him has to be considered.

i.e. Commission amount is Rs.100/-. Service tax collected by him is Rs.10.3/-

whether TDS should be on 100 or 110.3/-?

It is contended by one client that the service tax collected by the agent from the service receiver is reimbursement of expenses and for us, it is commission..

i wish to know that whther this stand is correct or not.

Further, in Profit and loss account the entire amount i.e 110.3 is charged as Commission paid. (No distinction between commission and service tax paid- in the books of the service receiver) ( the Service receiver is not claiming any input tax credit as he is not liable to any Service tax or Excise duty)

kindly clarify

Angayarkanni Murugesan

Aditya Maheshwari

Aditya Maheshwari (Expert)
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18 June 2009 Service tax should be deducted on Rs. 110.30 as this is the total debited to the profit & loss a/c and further more even TDS on service tax on professional fees paid to deducted and generally everyone in the industry is deducting TDS on service tax also.

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