TDS on freight charges

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accountant
64 Points Posted on 17 September 2007

Dear sir,


             A pvt company paying a freight charges of Rs 11,236 to a transporting agnecy which includes the service tax @ of 12.36% charged by the transporting agency.Could you tell us wheather the TDS has to be deducted on gross amount(ie 10,000+ service tax @ 12.36%) or on the net amount(ie 10,000) of freight charges??????????

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On 17 September 2007 at 08:20 Report
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433 Points Posted on 17 September 2007
Tds on Gross Total
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On 17 September 2007 at 09:00
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Corporate Executive
28 Points Posted on 17 September 2007
The CIT (TDS), Mumbai has given a clarification under the Right to Information Act, stating that TDS is to be deducted on the amount inclusive of Service Tax. Thus it may be followed.
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On 17 September 2007 at 09:19
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Chartered Accountant
3847 Points Posted on 17 September 2007
The intention of the statute is to collect TDS on freight but not on service tax. Hence TDS should be made on Rs.10000/-This is my opinion.
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On 17 September 2007 at 09:43
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Articled Asst.
193 Points Posted on 17 September 2007
As Mr.Saibaburao said intention is not to collect tds on service tax. But section 194C says that tds should be deducted on amount credited to the party. You are giving credit to party inclusive of service tax. and hence tds is on whole amount only.
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On 17 September 2007 at 12:26
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Service-CA
44 Points Posted on 17 September 2007
Sec 194 C used tyhe word "Any sum" .The Any sum might be reimbursement of expenses with out bills , service TAx etc .So TDS is on Full amount .
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On 17 September 2007 at 12:30
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Program Manager
5910 Points Posted on 17 September 2007
Hi Service tax is something like Excise Duty and when we calculate Sales Tax we take the Gross value. In this case we should take the gross amount ie incl of Service Tax for TDS calculations
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On 17 September 2007 at 14:10
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Chartered Accountant
4772 Points Posted on 17 September 2007
on gross amount
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On 17 September 2007 at 15:07
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Guest

Posted on 17 September 2007
TDS should be on 10000/- and not including service tax..
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On 17 September 2007 at 21:47
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Article (Final Result waited)
391 Points Posted on 18 September 2007
jagdist first thing is that now u should not any amt of sevice tax to transporter,if u do so then service tax paid by u @ 3.09%,then tds will be deduct 10000 & if u pay s.tax to transportor then u should deduct tds on 10000+s.t.
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On 18 September 2007 at 11:36
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Guest

Posted on 19 September 2007
In case of freight charges, liability of deposit of service tax lies with the person or co. who is receveing service from the service provider. So in case you are paying freight charges to any transport co. against their services then you should deduct TDS on the amount of their service after excluding the amount of service tax. Based on your query TDS would be deducted on 10,000/- only. You should deposit the amount of service tax to the govt. treasury and also can avail the credit of the same.
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On 19 September 2007 at 12:21
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Profession
166 Points Posted on 19 September 2007
Elements of a single nature of payment shall not be segregated for TDS puropose. Hence gross is to be considered
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On 19 September 2007 at 23:38
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Manager- Accounts/Tax/Finance
229 Points Posted on 21 September 2007
In the tax audit of some export companies what i have found that they are deducting the TDS on gross amount of freight. The basic logic behind this is that what our income tax act says to deduct TDS on the amount credited to the account of payee(to whom payment is to be made). That's why if we credit the full amount to the acccount of our payee then TDS would be deducted on the amount credited which would include the element of service tax too.
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On 21 September 2007 at 12:22
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Manager- Accounts/Tax/Finance
229 Points Posted on 21 September 2007
dinesh i agree with your view. You are completely right
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On 21 September 2007 at 12:24
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student
93 Points Posted on 22 September 2007
tds should be deducted on gross amount i.e. inclusive of service tax i hav a clarification by CIT ......if anybody wants
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On 22 September 2007 at 16:27

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