TDS on Gross Bill Inclusive of Service Tax

Pls Help,

Should TDS be made on Gross bill inclusive of Service tax or exclusive of service tax. I have seen many companies to be in safe side deduct TDS on the Gross bill inclusive of service tax. Is it correct as it amounts to "tax on tax"????

Replies (12)

Tds has to be deducted on gross bill(including service tax) except for sec.194I(rent). Department came up with the notification to clear all these doubts.

Originally posted by :vinay chopra
" Pls Help,
Should TDS be made on Gross bill inclusive of Service tax or exclusive of service tax. I have seen many companies to be in safe side deduct TDS on the Gross bill inclusive of service tax. Is it correct as it amounts to "tax on tax"????
"


 

According to notification issued by the department TDS in case of Rent (194I) is deducted on gross bill less service tax and in another cases on bill amount.

Dear,

They are correct.... according to the provisions of TDS, the gross bill (VAT, Service tax) will liable for the dedcution of tax. Except in the case of rent on service tax (specifically issue a notice).

I agree with Mr. Shudhansu execpt Rent TDS to be deducted on Gross amount. inclisive of  Servicetax.. If U read Sec. 194 C , 194 J etc . it is given ......any sum to any resident ....

thanks everyone, i got the answer.  I read the said notification. But i am still unclear reason for this. Dont u ppl think that TDS shouldnt be made on service tax element?? I peronally think that will be more logical.  

Hello.Even i think dat tds on gross bill is just like tax on tax y not an institute guideline clarify dis by giving out the reason for tax on tax

 

Thanks Namrata for agreeing with me.

Hi guys

According to me double taxation occurs when any income is taxed twice in the same Act. But if any service tax is added in the bill then its under the service tax act where as TDS in under the Income Tax Act.

Do correct me if im wrong

Thanks  

Dear Namrata

U read the TDS sections , U will find yr reply. in some odf section viz. 194C, 194J says that  any sum paid to any resident.............. it means includes everything let it be servicetax and reimbursement  or any other levies.. U hav to deduct tax on payment made by U. Once the Act is clear nothing can be done.Hope so all of  us will be clear in this matter .

Surana ,9952967237

Kindly note the following: In order to arrive the cost f of a finished product we use to calculate CIF value and so on ,So the same login applies here also. In fact I was told to add the TDS value also to account as receipts consideration while remitting Service Tax component.

Vinay, Namrata et all,

TDS is not a tax in itself. It is only an advance which can be adjusted by the assessee while filing the returns.  I agree with you that Government wants to earn in advance.

 

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