Tds deducted on consultancy services

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Querist : Anonymous

Querist : Anonymous (Querist)

12 May 2014 Hi to all ,

Can you give me the advise for TDS deducted on consultancy services inclusive service tax are exclusive service tax. means if xyz party raise the bill under below mentioned format

Bill value = Rs 100
ST amount = Rs 12
Total Bill value = Rs 112

in this bill i am deduct the TDS on Rs 100 or Rs 112/-

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)

12 May 2014 TDS to be deducted on amount excluding service tax I.e., on Rs 100/-.

Querist : Anonymous

Querist : Anonymous (Querist)

12 May 2014 thank you gupta gi,for giving advise.
and can you provide the act copy of sir.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)

12 May 2014 The CBDT has issued Circular No. 1/2014 dated 13.01.2014 pointing out that the Rajasthan High Court has taken the view in CIT(TDS) vs. Rajashthan Urban Infrastructure that if as per the terms of the agreement between the payer and the payee, the amount of service-tax is to be paid separately and was not included in the fees for professional services or technical services, no TDS is required to be made on the service-tax component u/s 194J of the Act. Pursuant thereto, the CBDT has decided in exercise of powers u/s 119 that wherever the terms of the agreement/ contract between the payer and the payee, the service tax component comprised in the amount is indicated separately, tax shall be deducted at source under Chapter XVII-B of the Act on the amount paid/payable without including such service tax component. So agreement/contract (be it verbal or written is an essential element).

Complete notification may be seen from below link--

https://law.incometaxindia.gov.in/DIT/Circulars.aspx

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