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tds on service tax

This query is : Resolved 

OUR PROFESSIONAL BILL INCLUDE SERVICE TAX WHICH IS OUR LIABILITY ON WHICH AMOUNT TDS SHOULD BE DEDUCTED NET OR GROSS INCLUDING SERVICE TAX


Though the service tax is payment to be made to the Govt. but as per the words of the act it is a statutory liability of the deductor to deduct, though it is not very favourab;e for the deductee but there are no clarifications.

There is divided opinion on the issue. However, the view that TDS should be deducted from the gross amount outweigh the other view.

Viewed from the point of view of the deductee, ie. the service receiver, the service tax, or for that matter any other statutory levy, charged in the bill is a part of the cost of professional sevice. Hence the service component should also be subjected to TDS.

The same opinion has been expressed in an article titled "Woes of TDS Rate Hike" published in thehindubusinessline.com.

In my humble oipnion, TDS should be deducted from the gross amount.


being profesional bill tax is to be deducted u/s 194J as per which tax is to be deducted on the FEES paid and sercive tax is not a part of such fees.

based on such logic i personally feel that tax is to be deducted on the amount net of service tax.

In absence of any clarification from Depptt, there is difference of opinion. But I am fully agree with view of Mr Shyam Lal Naik and also advised you to avoid any litigation / problem it is alwatys better to deduct TDS on gross amount.

In my view there is no dispute. TDS should be deducted on gross amount as per wording of the ACt TDS will be deduct on amount paid or credit hence here amount paid/credit is including ST & the tax deductor is not capable to assess the income of the recepient

tds on amount inclusive of service tax

This seems to a never ending debate. Can we raise this question before the Board for further clarification?


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