Tds on consultation services

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Puneet Ahuja (Querist)
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17 May 2013 Hey All,

This query relates to hiring of a professional as a consultant by a firm or a company.
Suppose the amount paid as retainership payment is Rs 20000 p.m.
What would be the tds provisions attracted and the journal entry for the same in the books of the Employer or the person receiving the consultancy services.
Is there an service tax liability on the part of the payer or receiver.
Regards
Punit

Sumit Grover

Sumit Grover (Expert)
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17 May 2013 TDS u/s 194J @10%(on the amount inclusive of service tax)...and Service tax liability of service provider only on whole amount @12.36%(assuming he is not covered under SSI)

In the books of the service provider

Monthly entries:
Party A/c Dr. 20,225
TDS Receivable A/c Dr. 2,247
To consultancy income A/c 20,000
To Service tax payable A/c 2,472

In the books of the service receiver
Professional Chgs A/c Dr. 20,000
Service tax expense(or CENVAT A/c) Dr.2,472
To Vendor A/C 20,225
To TDS Payable A/c 2,247

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Puneet Ahuja

Puneet Ahuja (Querist)
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17 May 2013 Thanks Sumit...
Regards
Punit

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