TDS on Service Tax

As per the latest circular of IncomeTax which I read few mpnths ago, TDS should be deducted on the amount excluding ServiceTax.

as per the latest amendment only on rent on immovable property tds is to be deducted excluding service tax

and in other cases it is to deducted including service tax

Dear friends,

Kindly clarify below points

1. Service tax  is not an income it is the liability,  then how can we deduct TDS for the same.

2. If we are deducting TDS on service tax means, is it double time taxation know?.

Pls clarify the same

it was for tds on rent i.e.194i

 Refer CIRCULAR NO. 4/2008, DATED 28-4-2008

As per the circular, it is clear that TDS to be deducted exclusive of service tax if the payment is relating to rent. in other cases, it is to be inclusive of service tax. refer to the circular in the following link. fn=/dittaxmann/circular/cir4_2008.htm

TDS is to be deducted on gross amount (inclusive of Service Tax).

But in the case of rent TDS is to be deducted on net amount.(exclusive Service tax)

Dear All

we are hiring the vehicle on fixed rate basis per day 1500/- (80 Km , 12 hrs)

Kindly clarefy the Aplicable TDS on above subject.

Regards

Dileep

Service Tax should be included for deducting Tax. But for rent payment, it should be excluded as per the latest circular

Deptt has clarfied that for the purpose of TDS u/s 194I rent, TDS is to be deducted on amount excluding ST. Since there is no such clarification for TDS under other sections, it can be safely implied that the payer needs to deduct TDS including ST under other sections

Hi Dileep;

Answer for your query, The definition of Sec. 194-I, talks about rent in the normal course. it doesnot specify any clauses or explanations of charging on rate basis etc.,

in my view TDS to be deducted

TDS willbe deducted exclusive of service tax in case of Rent (Section 194I) as per new notification and in other cases TDS willbe deducted inclusive of service tax

Hi

TDS to be deducted exclusive of service tax if the payment is relating to rent. in other cases, it is to be inclusive of service tax. Could you give examples for both the cases ie Rent and Other cases taking both service tax and TDS into the calculation please?

Say, if the amount of service is 1,00,000/- INR, the entry/calculation in the case of 'others', would be as follows: TDS @ 11% with E Cess 3% AND Service Tax 12.5% with E cess 3%

      Vendor                                   88,670.00              Cr
      ECS on TDS                               330.00              Cr
      TDS  withheld                       11,000.00              Cr

       Expenes (services)              88,999.64             Dr
      Service Tax Payable            10,679.96              Dr
      Ecess on ST payable               320.40               Dr
      

In the case of RENT, it would be as below: TDS @ 22% with E Cess 3% AND Service Tax 12.5% with E cess 3%

      Vendor                                   79,832.60              Cr

      ECS on TDS                               587.40              Cr
      TDS  withheld                       19,580.00              Cr ((Here, do we need to calculate on 88,999.64 instead of 1,00,000)??!! Pls clarify.

      Expenes (services)              88,999.64             Dr
      Service Tax Payable            10,679.96              Dr
      Ecess on ST payable               320.40              Dr
      

Thanks

Sri