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TDS on Service Tax

k.prabhakaran (finance) (33 Points)

17 December 2008

Dear All,

Kindly clarify whether the TDS has to deducated on inclusive of service tax for making payment to clearing and forwarding agent.

Regds

kprabhakaran

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17 Replies

Jitender (Chartered Accountant) (8724 Points)
Replied 17 December 2008

it is to be deducted inclusive of service tax.

Ajay B Patel (CA Final Student) (23 Points)
Replied 17 December 2008

As per the latest circular of IncomeTax which I read few mpnths ago, TDS should be deducted on the amount excluding ServiceTax.

Rajat Kedia ACA CS MCOM (Assistant Manager) (613 Points)
Replied 17 December 2008

as per the latest amendment only on rent on immovable property tds is to be deducted excluding service tax

and in other cases it is to deducted including service tax

S.Vijay Anandh (Analyst - Finance) (112 Points)
Replied 17 December 2008

Dear friends,

Kindly clarify below points

1. Service tax is not an income it is the liability, then how can we deduct TDS for the same.

2. If we are deducting TDS on service tax means, is it double time taxation know?.

Pls clarify the same

CA Amit Jaiswal (Finance Manager) (2720 Points)
Replied 17 December 2008

it was for tds on rent i.e.194i

Ravikumar.G (Consultant) (18525 Points)
Replied 17 December 2008

Refer CIRCULAR NO. 4/2008, DATED 28-4-2008

Sandeep (Audit Manager) (81 Points)
Replied 17 December 2008

As per the circular, it is clear that TDS to be deducted exclusive of service tax if the payment is relating to rent. in other cases, it is to be inclusive of service tax. refer to the circular in the following link. fn=/dittaxmann/circular/cir4_2008.htm

Jyoti Malik (ACCOUNTANT) (2644 Points)
Replied 17 December 2008

TDS is to be deducted on gross amount (inclusive of Service Tax).

But in the case of rent TDS is to be deducted on net amount.(exclusive Service tax)

Dileep (Finance Exective ) (23 Points)
Replied 18 December 2008

Dear All

we are hiring the vehicle on fixed rate basis per day 1500/- (80 Km , 12 hrs)

Kindly clarefy the Aplicable TDS on above subject.

Regards

Dileep

Sripada M (CA) (365 Points)
Replied 18 December 2008

Service Tax should be included for deducting Tax. But for rent payment, it should be excluded as per the latest circular

Gourav Goel (Articled Trainee) (32 Points)
Replied 18 December 2008

Deptt has clarfied that for the purpose of TDS u/s 194I rent, TDS is to be deducted on amount excluding ST. Since there is no such clarification for TDS under other sections, it can be safely implied that the payer needs to deduct TDS including ST under other sections

Sandeep (Audit Manager) (81 Points)
Replied 18 December 2008

Hi Dileep;

Answer for your query, The definition of Sec. 194-I, talks about rent in the normal course. it doesnot specify any clauses or explanations of charging on rate basis etc.,

in my view TDS to be deducted

Shudhanshu Agrawal (Business) (2570 Points)
Replied 18 December 2008

TDS willbe deducted exclusive of service tax in case of Rent (Section 194I) as per new notification and in other cases TDS willbe deducted inclusive of service tax

sri (Software) (83 Points)
Replied 23 December 2008

TDS to be deducted exclusive of service tax if the payment is relating to rent. in other cases, it is to be inclusive of service tax. Could you give examples for both the cases ie Rent and Other cases taking both service tax and TDS into the calculation please?

Say, if the amount of service is 1,00,000/- INR, the entry/calculation in the case of 'others', would be as follows: TDS @ 11% with E Cess 3% AND Service Tax 12.5% with E cess 3%

      Vendor                                   88,670.00              Cr
      ECS on TDS                               330.00              Cr
      TDS withheld                       11,000.00              Cr

       Expenes (services)              88,999.64             Dr
      Service Tax Payable            10,679.96              Dr
      Ecess on ST payable               320.40               Dr

In the case of RENT, it would be as below: TDS @ 22% with E Cess 3% AND Service Tax 12.5% with E cess 3%

Vendor 79,832.60 Cr

      ECS on TDS                               587.40              Cr
      TDS withheld                       19,580.00              Cr ((Here, do we need to calculate on 88,999.64 instead of 1,00,000)??!! Pls clarify.

      Expenes (services)              88,999.64            Dr
      Service Tax Payable            10,679.96              Dr
      Ecess on ST payable               320.40              Dr

Thanks

Sri