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TDS Deduction on Service Tax

balakmu (22 Points)

26 July 2007

Dear Members

Please clarify whether TDS to be deducted on the service tax amount also when you receive the bill value with the service tax

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37 Replies

sreenivasa rao (STUDENT) (13 Points)
Replied 26 July 2007

may be it doesnt required | I think

CA CS CIMA Prakash Somani (Landmark Group) (23502 Points)
Replied 26 July 2007

yes

rnvco (13 Points)
Replied 26 July 2007

yes, because tds to be deducted on total bill amount paid.

Shyam Lal Naik (Service) (6156 Points)
Replied 26 July 2007

All my clients including big PSUs are deducting TDS on Service Tax Component also. I personally feel, they are right.

Shiv (Service) (22 Points)
Replied 26 July 2007

TDS should be deducted on total amount of bill including service tax.

Late CA Sampat Jain (Chartered Accountant) (4772 Points)
Replied 26 July 2007

Yes TDS is to be deducted on amount including service tax

Gauravgupta (63 Points)
Replied 26 July 2007

accd. to the language of the act except for section 194C & 194J tds is to be deducted on an amt. which is the "income" of the other person . While in case of 194C & 194I tds is to be deducted on "PAYMENTS" made. Now since service tax is not the income of the other party hence i guess benefit can be availed in cases other than 194C & 194I

(Guest)

TDS HAS TO BE DEDUCTED ON SERVICE TAX AMOUNT WHEN THE SERVICE TAX IS ADDED IN THE BILL.

(Guest)

While calculating the TDS on total bill amount it will be like double taxation Tax on Tax. The tax so deducted is higher if you compare with the actual income. At the same time it is likely to be benifit for the assessee at time of paying the tax because he has paid more which he may get it as a refund otherwise it will reduce the tax liability. The deduction is a benifit to the assessee hence it can be deducted on gross amount.

Pankaj (student) (22 Points)
Replied 28 July 2007

yes, tds should be deducted on total bill amount including service tax.

sunny (ACCOUNTANT) (25 Points)
Replied 28 July 2007

yes. i m agree with this is answer

CS MD Osman Akthar (Company Secretary & CA(Final)) (78 Points)
Replied 30 July 2007

When there is abiguity over an issue, then the intent of the legislature should prevail. In present case it is very clear that TDS to be collected on INCOME, but not on any TAX even it is included in total bill amount. So, TDS to be on net amount of bill.

aca.chand.bagaria (Chartered accountant) (42 Points)
Replied 01 August 2007

tds should not be deducted on service tax. say e.g. Value of bill 100.00 Service tax 12.36 Total 112.36 you have to deduct tds on Rs 100 not on 112.36 It has been mention in Feb 2007 EIRC issued by ICAI that tds should not be deducted on service tax

(Guest)

Actually i got professional fees at the end of the month, not the salary. And 11.33% TDS is deducted from my prof. fees every month. Actually I dont know whether it should be deducted from my prof fees or not as it is less than 1,00,000 p.a.