Please tell me whether TDS will be deducted on the whole bill amount including service tax/VAT or on the amount excluding service tax/VAT.
Eg: Fabrication amount - Rs. 50000
VAT 4% - 2000
Now will TDS is to be deducted on Rs. 50000 or on Rs. 52000?
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TDS on which amount
Replies (15)
In case VAT is levied, Tax would not be deducted since it is a case of sale of goods and not contract for work and labour.
By Circular No. 4/2008, dated 28-4-2008, CBDT clarified that Service tax paid by the tenant doesn’t partake the nature of income of the landlord, thus TDS has not to be deducted on Service tax. Though this clarification was in respect of section 194I, but it was the considered opinion of professionals and tax consultants that this view is also applicable in respect of other TDS provisions.
Please made me clear. There are different opinions on this as Mr. Deepak and Miss Kaya have said contradicting views.
IN CASE OF 194C THE TAX IS TO BE DEDUCTED AT THE GROSS AMT AS COMPARED TO SEC 194I WHICH SPECIFICALLY PROVIDES FOR INCOME SO WE HAQVE TO DEDUCT THE TAX ON GROSS BILLING OF RS 52000
Hi Naina,
According to Section 194C & I , if any Contractor made you invoice like given in your problem with VAT then the TDS is not to be deducted, but in case of Service tax it would be deducted on Gross amount (on rs.52000), so i think it should be clear to you now
Deduct TDS on full value, that is 52,000. The circular is applicable only for 194I
Naina,
Please go through the following:
1) VAT is applicable on sale of goods and TDS is deducted on specified services.
2) If it would be 'Fabric', VAT would be applicable.
3) Fabrication is service . Hence question of charging VAT do not arise.
4) Except in case of Sec 194I i.e. payment of rent, take Service Tax portion in account while deducting TDS.
5) Example: Fabrication Charge 10,000, Service Tax - 1,300. Total Bill of Rs.11,300. Deduct TDS on 11,300 and not on just 10,000.
If Vat Is charged on the bill then how TDS is deducted on it while TDS is applicable on specified services.. Except the serviec of RENT service tax amount should be included while deducting TDS....
VAT is applicable for works contract like construction contracts. Hence, TDS to be done for full value inclusive of VAT.
| Originally posted by :Naina | ||
| " | " | |
yeah deduct TDS on full amount.
Now here is a dyeing bill of Rs. 14301
Dyeing Charges Tax free A/c Dr. Rs. 4603
Dyeing Charges 4% A/c Dr. Rs. 9325
VAT Input 4% A/c Dr. Rs. 373
To Creditor A/c Rs. 14301
Now TDS should be deducted on Rs. 4603.
Am I Correct?
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