Querry about service tax

Yes, there will be TDS on service tax component under section 194C as the section uses the word " any sum..."

Yes !!! Sumanta,

its a correct system of calculation !!!

TDS is on amount inclusive of Service Tax !!!

So its coorect !!!

yes the concept is the TDS has to be calculated on gross amount of bill ,irrespective of internal components.

I thank all of you Sirs for the clarification.

One should refer to the clear text used in the relevant Act to decide whether to include Service tax in the gross amount for the purpose of deducting service tax. Service Tax does not form a part of the income of the receiver as it is to be deposited with the government.

If we read the text given u/s 194C of Income Tax Act, it says that,"(1) Any person responsible for paying any sum to any resident (hereafter in this section referred to as the contractor) ............."

While u/s 194-I (TDS on rent) says that," Any person, not being an individual or a Hindu undivided family, who is responsible for paying to [a resident] any income by way of rent, shall.............."

The words "any sum" as used in section 194C will include any sum whether it is by way of income or any other sum (even Service Tax), while in case of section 194-I the words used are "any income" and hence service tax (not being income) is to be excluded for the purpose of deducting TDS.

TDS is inclusive except Service tax on Rent on promises

Sir,

Is it mandatory that the service receipient should pay the service tax to the service provider? Whish section in the act says that the service receipient has to pay the service tax portion along with the bill amount? Please clarify.