Tds applicable on service tax...?

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

08 September 2011 Please tell me some organisation not deducting tds on service tax some orgnaisation deducting which one is the correct i am confused

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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08 September 2011 TDS applicable on the gross value of bill including service tax. only in case of Rent payment TDS apply excluding service tax

CMA Ashutosh Kumar Gupta

CMA Ashutosh Kumar Gupta (Expert)
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08 September 2011 The issue is debatable, because conceptually TDS should not be deducted on the service tax component part being not an income to the recipient but simply acting as a collection agent to the Deptt.
The Circular of IT Deptt. in the matter only excludes the same for provisions applicable under Sec.194 I Rent.
It must be reassessed in view of case laws as may happen to arise but so far no such references are readily available HENCE the views expressed above for applying TDS on service component part except towards Rent prevails.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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08 September 2011 As per Circular No.4/2008 dated 28.4.2008, it was clarified that TDS on rental payments would be required to be made only on the basic rental amount without including service tax. In other words, TDS should not be made on the service tax portion of the rent. However, this analogy is not applicable to TDS under other sections.

In short--
For 194I - Deduct TDS on amount excluding service tax.
For other section - Deduct TDS on amount including service tax.

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