Tds on vat & service tax invoice

DVat 3671 views 1 replies

CAN WE DEDUCTE TDS, IF THE SUPPLIER CHARGE VAT & SERVICE TAX IN ONE INVOICE SUPPY OF NETWORK SECURITY SUBSCRIPTION SUPPORT

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VAT, Service Tax and Income Tax (With-holdding tax) are three entirely seperate tax laws and establishing a nexus between them so infer/concluding mutual-exclusivity or superseding effect of one over another should not be a correct criterion at all.

Generally, the transations on which VAT is applied are not subjected to TDS as the Income Tax Act does not incorporate any provision as such in this regard (read the sections of Chapter XVIIB yourself, i bet you wont find any). Further, as far as the applicability of WHT/TDS on invoices incorporating Service Tax is concerned, TDS shall be deducted if the nature of services fulfill the 'basic charge', for instance in the case of 'Network Security Subscripttion Support', TDS shall be deducted under section 194J subject to the condition that the services rendered should fits in the definition of 'Fees for Technical Services' as defined under Explanation 1 to section 9(1)(vii)(b).

Though you havn't descried the nature of services received/rendered but keeping in mind the word 'subscripttion', i assume there must not be involvement of any human element invoved and therefore even section 194J shall not apply (for reference you may refer the landmark judgement of Madras High court Judgment in the case of skycell [(Sky cell Communications Ltd. v. Deputy Commissioner of Income-tax [2001] 251 ITR 53 (Mad)]


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