Tds on service tax
This query is : Resolved
17 October 2013
why tds deduct on s. tax amount exept rent??????
17 October 2013
Please refer the below file which was posted by me in caclubindia for detailed guidence about this
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https://www.caclubindia.com/share_files/tds-on-service-tax-on-all-payments-except-rent-56695.asp#.Ul9NsVCnqWY
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https://www.caclubindia.com/share_files/tds-on-service-tax-on-all-payments-except-rent-56695.asp#.Ul9NsVCnqWY
17 October 2013
Logically speaking, TDS is to be deducted from
the income of the recipient . Service tax is not an
income of the service provider as the service
provider would be collecting service tax from the
service receiver and depositing this amount with
the govt. So, the service tax collected is not an
income of the service provider and the service
provider is merely acting as an agent of the Govt.
So, the logically TDS should not be deducted from
the amount inclusive of service tax (i.e. Rs.
16,85,000) and should be deducted from the
amount exclusive of service tax (i.e. Rs.
15,00,000)
the income of the recipient . Service tax is not an
income of the service provider as the service
provider would be collecting service tax from the
service receiver and depositing this amount with
the govt. So, the service tax collected is not an
income of the service provider and the service
provider is merely acting as an agent of the Govt.
So, the logically TDS should not be deducted from
the amount inclusive of service tax (i.e. Rs.
16,85,000) and should be deducted from the
amount exclusive of service tax (i.e. Rs.
15,00,000)
17 October 2013
The Central Board of Direct Taxes vide Circular
No. 4/2008 dated 28-04-2008 , announced that at
the time of payment of rent, TDS should be
deducted on the amount exclusive of service tax
as the landlord is only acting as a collecting
agent for government for collecting the service
tax. Therefore, TDS on rent should be deducted
on the amount without including service tax.
No. 4/2008 dated 28-04-2008 , announced that at
the time of payment of rent, TDS should be
deducted on the amount exclusive of service tax
as the landlord is only acting as a collecting
agent for government for collecting the service
tax. Therefore, TDS on rent should be deducted
on the amount without including service tax.
17 October 2013
Based on the viewpoint of the central board of
direct taxes, the whole industry stopped deducting
TDS on Service Tax and started deducting TDS on
the amount exclusive of service tax.
However, 2 months later vide Letter F. No.
275/73/2007-IT(B) dated 30-06-2008 , it was
announced that the exemption from deducting
TDS on Service Tax is only under Section 194I for
the rent paid. And therefore TDS on service tax is
liable to be deducted on all payments other than
for rent paid.
Deduction of TDS on Service Tax amount may be
logically invalid but sadly the viewpoint of the
govt is that TDS on Service Tax should also be
deducted (excl. rent) and we all will have to
follow the same as this is the law of the land.
direct taxes, the whole industry stopped deducting
TDS on Service Tax and started deducting TDS on
the amount exclusive of service tax.
However, 2 months later vide Letter F. No.
275/73/2007-IT(B) dated 30-06-2008 , it was
announced that the exemption from deducting
TDS on Service Tax is only under Section 194I for
the rent paid. And therefore TDS on service tax is
liable to be deducted on all payments other than
for rent paid.
Deduction of TDS on Service Tax amount may be
logically invalid but sadly the viewpoint of the
govt is that TDS on Service Tax should also be
deducted (excl. rent) and we all will have to
follow the same as this is the law of the land.
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