Tds not deduct amount of service tax in bill

This query is : Resolved

mahendra patel (Querist)
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20 July 2012 payment of a bill n TDS deduct but TDS NOT deduct of service tax amount charge in bill..n this type amount including in bill.
in case of a contracter
case .
bill amount. 10000
service tax amount. 1236
TOTAL BILL AMOUNT. =11236
when payment of bill TDS Deduct on 10000 re. @2% ...
and also provision mead for service tax 1236..
so plz tel me right effact of this type tranjaction fully describe plzzz..waiting for ans ..

Mohit Naithani

Mohit Naithani (Expert)
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21 July 2012 TDS is to be deduct on whole amount of Invoice including Service Tax,

But TDS U/s 194I (TDS on Rent) is applicable on an amount excluding Service Tax.

Now u have to make it clear that under which sec. TDS is applicable upon your invoice.

Nischit Sanghavi

Nischit Sanghavi (Expert)
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21 July 2012 There are two options:
1) u may ask the party for revise the bill and consider the amount of Rs.10000/- including servic tax. i.e Bill amount Rs.8900/- plus Ser tax @12.36% 1100 so, total amount Rs 10000/-.
2) U may revise your TDS return by paying difference amount i.e. TDS on Ser Tax amount with interest.

Mohit Naithani

Mohit Naithani (Expert)
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21 July 2012 I think no one going to revise its invoice with low price, hence 2nd option by Nischit is best for your regard.....

Nischit Sanghavi

Nischit Sanghavi (Expert)
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21 July 2012 Mr. Mohit, i am agree with you but if your party has a long relation with you then he may do this. He may adjust the remaining amount in next bill.

Rajni Kant

Rajni Kant (Expert)
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25 July 2012 I want to ask one more query with experts, what will happen in case contractor raised inovice with their portion of service tax as provider and service receiver is also liable to pay service tax partly on the same invoice, whether service receiver is also liable to deduct tax on their own liability of part service tax as receiver?
Whether your answer will differ if the laib. of receiver loaded first as exp. and deduct the same as service tax from the same bill.

Mohit Naithani

Mohit Naithani (Expert)
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25 July 2012 Are you talking about Service tax paid by Manufacturer on behalf of contractor????

Rajni Kant

Rajni Kant (Expert)
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25 July 2012 yes...by manufacturer or service receiver under reverse mechnism.

Mohit Naithani

Mohit Naithani (Expert)
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25 July 2012 Service Tax paid by manufacturer on behalf of Civil Work Contractor (Where Cost of material + Service is inseparable)@4.09% (33% of service tax rate). But Service Receiver (Manufacturer) is not paying it from its Pocket but paid in on behalf of Civil Work Contractor and claim Modvat of that amount.

Service Tax paid by Manufacturer on behalf of Civil Contractor is not effecting TDS Liability and TDS is to be deduct at prescribe rate of 1% (Individual / HUF) or 2% (Firm/Co. etc).

Rajni Kant

Rajni Kant (Expert)
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26 July 2012 I am talking about Notification No.30/2012 Dt.20.06.2012 of Service Tax where service tax has to be paid by the receiver and its also the liability of the receiver where services received from Individual, HUF, Firm or AOP (i.e. other than a body corporate) by the body corporate.
Whether tds u/s 194C of Income tax act is applicable on service tax (which is a liability of service receiver)?

Mohit Naithani

Mohit Naithani (Expert)
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26 July 2012 Yes the same i m talking about. Its just a liablity to pay service tax on behalf of Service provider but it did not effect the TDS Liablity of an Assessee, hence TDS is to be deduct on the same....
Entry should be

Repair & Maint (Plant & Mach) Dr. 1000
Service Tax Modvat (Dr) 12
Service Tax Payable (Cr) 12
TDS On Contractor (Cr) 21
XYZ & Co. 979

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