Deducting both tds and service tax

CA Final 1255 views 2 replies

Aditya Vikram

81 Points Posted on 25 November 2013

Hello guys,

I dont know how to explain this, but I have hit a technical speed-bump. I'm a little confused on something.

Now I have a service, say Office Security Guards.. service tax is being charged, AS WELL AS TDS @ 2%. And I have another service Air Travel Agent who provides us with Air tickets for travel, and there only ST is charged...

When do these instances occur where TDS is deducted along with service tax? I'm a little confused on TDS concept here.

Another instance where TDS was deducted along with ST was COURIER charges.

Please help solve this confusion.

I have a partial theory, when service is provided, ST is charged...when _______ is provided, TDS is done... what is this _____? I cant put anything in these blanks to help understand it.

Replies (2)

Mihir

Wealth Manager

5293 Points Posted on 25 November 2013

Service tax is part of indirect tax, whereas TDS is part of direct tax. One is an addition in the invoice, and the other is subtraction from the payment made. You provide some services, you will have to add service tax of 12.36% into your invoice/bill, and this service tax will have to be deposited in the bank by you. The person who will pay you, will deduct TDS of 2% and deposit it in the govt treasury on your behalf which you can claim in your IT returns.