Tds issues in case of bill with service tax

Originally posted by : Janak
	If contractor issued bill inclusive of service tax, on which amount tds is deductible, contract amount or total amount including TDS ??

TDS shall be deducted without including the service tax, if it's charged separately.
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CBDT vide Circular No. 01/2014, dated 13.01.2014, has clarified that wherever in terms of the agreement/contract between the payer and the payee, the service tax component comprised in the amount payable to a resident is indicated separately, TDS shall be deducted on the amount paid/payable without including such service tax component.

Please clarify what do you mean by inclusive of service tax:

Say service amount is 100/- and service tax thereon 12.36/-

then is the bill a single amount of 112.36/-

or

service charge 100/-

service tax 12.36/-

total 12.36/-

??

If Contractor issued Composite bill then TDS should be deduct on Gross Value of Bill.