Tds implication under reverse charge

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This query is : Resolved

Sunil Kumar Mallla (Querist)

27 December 2013 As all are aware that under REVERSE CHARGE service receiver are liable to deposit service tax at prescribed even though service provided is not liable pay.

However TDS is deducted on total of bill amount along with service tax (if any) except in case of rent (194 I).

Now there is a situation where a company registered under reverse charge for service like Rent-a-Cab, Manpower-Service, Legal etc.,

In all the above case service tax is payable by service receiver (Fully / Partially). Now advise me how to calculate TDS where invoice shows only service charge
and no service tax.

Eg: - Rent-a-cab

Bill Amt Rs 27,000/-

Normally TDS (1%) -194 C is Rs 270/-

However Under reverse charge assuming abatement Service Tax is Rs 1,335/- (40% of 12.36% on Rs 27,000/-)

Now TDS (1%) - 194C is Rs 283/-

Hope above calculation is correct. Now at the time issue TDS certificate the bill amount should Rs 28,335/- or Rs 27,000/-

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)

02 January 2014 1. Your TDS calculation is absolutely correct. TDS will be deducted on the bill amount + service tax charged in the invoice.

2. While filing TDS return and issuing Form 16A, gross amount shall be Rs. 28,335/-.

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