Tds

Dear Sravni,

Irrespective of the fact both the taxes go to the Central government, these taxes are of different natures as far their taxability is concerned.

Service Tax is collected by Service Provider from service receiver. However there is also a provision of reverse charge u/s 68(2) where service receiver pays tax on 100% or less amount of service received  which depends upon the type of services received.

TDS is a tax deducted by Income provider. TDS is tax which is deducted on source excluding any tax component (like service tax).

As far your query is concern you fall under reverse charge of service tax therefore you will have to pay service tax as a service receiver. At the same time you are a Income provider too, therefore you will have to deduct TDS on the source of income provided by you excluding service tax component. The taxabe amount will be same for both Service Tax and TDS. If it does not happen it will result in double taxation i.e. TDS (a tax) is charged on Service Tax (another tax).

Thanks and Regards 

Shresh Kumar

Thanks for Your reply.......... and my doubt is why govt collecting two taxes on same  amount

ex: amity consultancy providing man power to corporation (a state govt undertaking) on outsourcing basis.

bill amount---- 167173 (inclusive of salaries, telephone charges, bus charges,epf,esi and service charges(1953)

corporation paid 

tds 3343(167173*2%)

service tax 25532(1671173*15%)

and my doubt in this why govt collecting both on same amount (two Times)

please clarify my doubt in detail