service
20 Points
Joined March 2008
Circular is not clear as it states TDS on any sum, that means it is not clearly specified that Service tax part should also be subject to TDS.
Therefore we should go for REASONABLE/HARMONIOUS CONSTRUCTION and draw out the intention.
As Service Tax is an Indirect Tax to be collected on behalf of the GOVT. itself, if I am collecting less (due to TDS) fairly I should deposit less. Another controversy shall arise for Service Tax collectors. Also Service Tax is applicable on Receipt basis, would you advise for reverse calculation and thereby depositing Sevice Tax as Net (collected) amount.
It is therfore amply clear, that TDS (Income Tax Law) should be subjected to Income Part only and not on the reimbusement part.
Dilip Das