The Query is as under;
For Eg. ABC LTD is receiving the service of consultancy from Mr. XYZ.
Now Mr XYZ has issued a bill of Rs. 100/-
ABC LTD has deducted TDS of Rs. 10/- on such service and paid Rs. 90/- to MR. XYZ and also charged Service Tax on Rs. 90/- at the time of payment (as the case falls under RCM).
Now ABC Ltd did not charged service tax on Rs. 10/- (Being amount of TDS) at the time of payment of Rs. 90/- but charged Service Tax on the date of Issue of TDS Certificate).
The company is of the view that service tax is to be charged only when payment is made (i.e. payment received by service receiver) and in case of TDS the deductee (i.e. service Provider) is not entitle to receive TDS till the issuance of Valid TDS certificate duly signed by the deductor (i.e. the company).
Weather this practice is correct as per law or,
Is there any other view point in this regards???
CAclubindia
