TDS ON SERVICE TAX

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navneet (Querist)
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02 December 2009 Is TDS to be deducted on service tax portion of a bill,I have 2 views in this regard that are contrary to each other plz clarify

1) u/s 194c TDS is to be deducted on ``any sum" paid to the contractor which supports the view of TDS on gross amount.

2) Service tax is the income of the exchequer and not the person who is charging it,TDS is a tax then why should he be made to pay tax on govt,s income.

Plz quote any clerification,order or amendment in this regard if possible.

Murtaza I Bhagat

Murtaza I Bhagat (Expert)
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02 December 2009 on gross amount which is going to be paid or will be payable.

ANIL JANGID

ANIL JANGID (Expert)
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02 December 2009 No tds is to be deducted on amount of rent,contract,commission,etc excluding service tax.

Please refer below circular issued by CBDT in this context:A long awaited clarification regarding tds u/s 194-I regarding rent payment has been Issued by the CBDT.The issue is that

navneet

navneet (Querist)
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02 December 2009 i know abt the circular regd charging of tds on rent exclusive of service tax,after that there is another circular which notifies that tds has to be deducted on gross amount while making payment u/s 194J
but this notification stays silent about payments u/s 194c.Thus can it be interpreted that clarification 194I can be extended to payments u/s 194c?

Shyam Lal Naik

Shyam Lal Naik (Expert)
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03 December 2009 The clarification can not be extended to 194C.

Further the said circular is applicable to rent of commercial properties only. Since the circular talks about income of landlord. Owner of Plant, Machineries, Equipments etc. liable to TDS are not landlords. Hence the circular has limited application even in case of TDS u/s 194I.

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