Tds on service tax

Tds should be deducted on 112.36 however u/s 194-I i.e. in case of rent Tds has to be deducted on net amt. i.e. exclusive of service tax

TDS to be Deducted on Full Amount i.e. 112.36/- Including Service Tax.

Only U/s 194I Rent, No Need to Deduct TDS on Service Tax Portion.since There is One Notification for This Special Issue.

HI..

 The TDS is to be deducted on full invoice amount. For this the following entry can be done.

Regards

Anand.

CBDT had issued a circular vide circular No.04/2008 dated 28/04/2008.As per that circular,a person paying amount to a person for rent will not deduct tax on service tax.But if the payment is for professional or technical fees,the TDS is deducted on the amount includible service tax.

TDS DEDUCTED ON FULL INVOICE AMOUNT  RS. 112.36

I agree with Ayush Agarwal

TDS Should be deducted on Full amount i.e. Bill + Service Tax @ 12.36%, except only in one Case i.e On Rent, in Case of Rent TDS Should be Deducted on Bill exclusive of Service Tax.

 Reproducing the wordings of the provisions. Hope this clarifies your doubts.

194C. (1) Any person responsible for paying any sum to any resident (hereafter in this section referred to as the contractor) for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and a specified person shall, at the time of credit of such sum to the account of the contractor or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to

(i) one per cent. where the payment is being made or credit is being given to an individual or a Hindu undivided family.................

So in my view, TDS is to be deducted on the amount payable to the contractor. The amount payable to the contractor is not inclusive of service tax. Hence, TDS is to be deducted only on the gross amount, i.e. Rs. 100/-

Others may please comment.

Yes I do agree after 01.07.2012 in the given case, TDS on billed / credited  amount only  i.e Rs.100.

Thanks

Hi Ganesh Karthik,

     In the above case service tax liability to goverment is not new. Instead of service provider the service receiver is paying it. So the bill is about the service then tax is to be deduct on total amount. Only the service tax purpose we cannot say TDS should not be deduct.

   Lets take a case where service provider not charging service tax to service reciever because his gross annual turnover below the prescribed limit ( i.e 10,00,000). Then tell me service reciever whether to deduct tax or not..?

Sir,

Going by your own reply to this post in earlier, agreed that TDS has to be deducted on the entire invoice value including service tax if such service tax is included on the face of the invoice.

But in case of reverse charge mechanism, Service Tax is not at all charged on the face of the invoice. It is directly paid by the service receiver.

Hence,  I still stand by my view that, in such case (i.e. in case of reverse charge mechanism), the amount on which TDS is to be deducted shall be Rs. 100/- and not Rs. 112.36.

    In my veiw it suppose to be assume that the invoice is inculded service tax or else why service reciever should liable to pay the service tax..? Yes agree that the billing is only Rs. 100 but  according to service reciever total cash outflow from his hand for such service is including service tax... The practice is to deduct tax on inclusive of service tax. 

  In the given case we cannot deduct TDS on only service tax which is remitting to government because TDS not deducted to service provider is it...!  In another kind of service trasactions(except reverse charge machanism) the service provider liable to service tax and has to bear TDS too...

Thanks for your earlier comments.