TDS in freight seperately Shown in Purchases Bill

In this particular transaction, the payment of freight has been made by supplier. What he is asking for reimbursement of expenses. As it is reimbursement, and not a payment of freight, no TDS is deductible.

If service tax has not been paid by the supplier, and the buyer is responsible for payment of service tax as consignee, service tax should be paid. If however, both consignee and consigner is responsible for payment of freight, the supplier is paying freight- he should pay the service tax.

My opinion is bit different, If a single bill is raised by supplier for services and exp. , TDS needs to be deducted on total bill amount. Reason being, Act specifically states that TDS TO BE DEDUCTED ON AMOUNT PAID/CREDITED TO PARTY. There are some case laws also. The only solution is supplier need to raise different bills.

One more point to clarify second issue: formula for service tax & TDS issue:

(Invoice amount+Service Tax)*rate of TDS=TDS

I beg to differ from Abhinav. Just want to comment on the formula.

This is a formula of power play. One should keep the more powerful person (read department) happy and never bother if you are doing injustice to less powerful (read vendor). Cheers, this is the way life is.