TDS & Service Tax on Professional Fees

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Radheyshyam Falod (Querist)
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06 June 2009 I had made a payment of $ 1,500 towards consultancy to a party outside India in this month. I will have to gross it up for the purpose of TDS u/s 195 of the Income Tax Act @ 30.9% which comes to approx. $ 2,152 and i also have to pay service tax to the government @ 10.3% on the same as import of service. Now my query is whether $ 2,152 would be the figure inclusive or exclusive of Service Tax and whether TDS is liable to be deducted on the service tax payment and if yes then how will the computation be? Please reply.

Sumit gupta

Sumit gupta (Expert)
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07 June 2009 THIS IS A DISPUTED AREA STILL MANY CASES ARE PENDING IN COURT OF LAW. BUT PRACTICALLY AND GENERALLY TDS IS DEDUCTED AFTER INCLUDIN S.TAX IN BILL AMOUNT.

Radheyshyam Falod

Radheyshyam Falod (Querist)
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08 June 2009 But sir if i deduct TDS on service tax then i cannot remit the entire service tax. Eg: if Service tax amounts to Rs. 10,000/- then i have Rs. 10,000/- as service tax to the government. So how would i deduct TDS on the same? It would be impossible that i have to make payment to two different departments of government of the same thing.