Tds on service tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

04 August 2014 A Pvt. Ltd. Co. received bills of security exp., professional exp.
on which service tax is separately indicated. Till now, we are
deducting tds on total amount i.e. inclusive of service tax
But, many people advise us that we should deduct tds on
amount exclusive of service tax.

Should we now start deducting tds on amount excluding
service tax. If so, whether it will casue any problem in
assessment because for certain months tds deducted on
whole amount and in certain months on amount
exclusive of service tax.

Please advise.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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04 August 2014 as per notification no 1/2014 no tds is deductible on service tax portion.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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04 August 2014 TDS to be deducted on amount excluding service tax. The CBDT has issued Circular No. 1/2014 dated 13.01.2014 pointing out that the Rajasthan High Court has taken the view in CIT(TDS) vs. Rajashthan Urban Infrastructure that if as per the terms of the agreement between the payer and the payee, the amount of service-tax is to be paid separately and was not included in the fees for professional services or technical services, no TDS is required to be made on the service-tax component u/s 194J of the Act. Pursuant thereto, the CBDT has decided in exercise of powers u/s 119 that wherever the terms of the agreement/ contract between the payer and the payee, the service tax component comprised in the amount is indicated separately, tax shall be deducted at source under Chapter XVII-B of the Act on the amount paid/payable without including such service tax component. Complete notification may be seen from below link--

https://law.incometaxindia.gov.in/DIT/Circulars.aspx

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