Tds deduct on adjusted value or invoice value

Hi,

 We have received Rs. 100000 bill from service provider and booked on Aug-13. we deduct TDS 2% on Rs. 100000 and remit the same to department . After we passed one credit note to same party Rs.20000 against same bill ( due to poor service  ) on sep-13. 

Now, service provider ask to us " you should deduct TDS on adjusted value otherwise refund excess deduction of TDS amount to us".

Kindly advice what we do? Is The service provider statement correct or wrong?

Urgent pls. 

 

Replies (8)

his statement is wrong. as you have already remitted the amount to department, the service provider cannot claim excess from you.

Correct, they should remit you full amount of credit Note & they can claim tax credit.

This is a matter of mutual understanding between you and the service provider. upt o some extent Service Provider is correct. why should he pay tax on the amount which is not earned at all.

you may request him to claim the tax credit because tax has been deducted and deposited in earlier month.

on the other hand you may adjust the same payment of tax if you have tds liability under the same section in another month or claim refund of excess tax deposited

Originally posted by : Gaurav Agarwal

This is a matter of mutual understanding between you and the service provider. upt o some extent Service Provider is correct. why should he pay tax on the amount which is not earned at all.

you may request him to claim the tax credit because tax has been deducted and deposited in earlier month.

on the other hand you may adjust the same payment of tax if you have tds liability under the same section in another month or claim refund of excess tax deposited
agreed

 

1. This need to be resolved by mutual understanding.

2. But while mentioning the bill amount it should show as excess deduction. 

Tell them to download their 26AS tax credit statement & where they will be able to check the amount deducted by you is credited to their account.

Hopefully this will solve your problem.smiley

Regards

CA Ashish Lodha

 

dear sir mujhe purchase party se credit note mila h isme tds receiveble  kiya gaya h iski entry kaise hogi

For the purpose of deduction of TDS, the value of supply is to be taken as the amount excluding the tax indicated on the invoice. This means TDS shall not be deducted on the CGST, SGST or IGST component of invoice.

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