We have received an invoice of Rs 22860 as per detail below:
Software and license charges: Rs 20000
Service Tax on Rs 20000: Rs 2060
Vat @ 4% on Rs 20000 Rs 800
Please confirm that on which amount TDS should be deducted.
Thanx in adva
We have received an invoice of Rs 22860 as per detail below:
Software and license charges: Rs 20000
Service Tax on Rs 20000: Rs 2060
Vat @ 4% on Rs 20000 Rs 800
Please confirm that on which amount TDS should be deducted.
Thanx in adva
hey how both service tax and vat can come in one bill? i mean one is on goods and another on service
| Originally posted by :Kaya | ||
| " | hey how both service tax and vat can come in one bill? i mean one is on goods and another on service | " |
Strictly speaking both Service Tax and VAT will not arise. However, there are fringe (on the edge transaction) which are not clearly identifiable either as goods or service. So, the seller to be on the safer side collects Both VAT and Service. There are Supreme Courts and various other case laws regarding the same. However, still this is the sad position of LAW.
Coming to the Ques
We should also be on the safer side and deduct tax on the entire Invoice value (even includind the VAT amount).
If the opposite person objects to it ask him why he has collected both VAT and Service tax. Why take a risk of disallowance?. Anyways, he can claim the tax credit. Nobody loses.
This is the position as of today.
Shiva
Even in case such a thing happens that there is VAT as well as service tax, tax has to be deducted on the total invoice value. In your case, it is Rs.22,860/-. The Board (i.e. CBDT) has also clarified on it that tax has to be deducted on payment amount and not on the amount which is considered income by the payee. So tax has to be deducted on The gross value of invoice.
In the question Service tax and Vat included in the same bill. How it is possible?
One is for Service and other one is for Sale of Goods.
Still, please note tds should made always on excluding the tax amount.
Can anyone plz explain what will be the case when the payer avails INPUT TAX CREDIT of service tax or VAT under state act? In such a case the payer will, actually, paying a lesser amount by availing the input credit. So what should be done in such a case?
yes,tds should be deducted on whole amount means 22860.only in case of rent we dont consider the service tax component in the calculation of tds.
TDS shall be computed and deducted on amount payable or credited... it is irrelevent whether it include S Tax or not...
It has been clarified in the case of Associated Limited Vs CIT (SC) (1993), that its not the duty of payer to estimate income portion from gross amount payable...
The payer is required to simply deduct TDS on amount payable (or credited to PL/IE Ac) if exceed basic limit..
Further, where it is given that VAT has been charged then there will no TDS., as there is no liability of deducting TDS on payment made in respect of purchasing goods.., and VAT is charged on Goods, not on services..
I am not sure about that fact., but as far as I know, there is no such payment which is made for buying good and such goods are charged to VAT...
The TDS will be deducted on the gross amount i.e 22,860.
the VAT will be on SOftware purchase and the ST will be on development or installation of software, so there is no question to say that hw both St nd VAT is in same invoice...
This is a kind of Payment of Sale or Purchase which never comes under the purview of TDS. So, No TDS is deductible neither on Rs. 20000 nor on Rs. 22860
This is a kind of Payment of Sale or Purchase which never comes under the purview of TDS. So, No TDS is deductible neither on Rs. 20000 nor on Rs. 22860
tds will be deduct only Rs. 20000
Satis is correct, when they provide software or license on cd that is one kind of service and profession and not just a buying and selling. The same service is covered under Informations Technology services under section 65(105) in Finance Act, 194. Due to non availiblity of service amt and CD amt seperately it was charged on whole amount and also VAT is charged on it, which is correct.
Your are not logged in . Please login to post replies
Click here to Login / Register
Subrahmanyam & Sivudu CA Firm
Hyderabad
CA Inter
View Details
Twenty Point Nine Five Ventures Private Limited
Noida
CA Inter
View Details
CCI
Pro
India's largest network for
finance professionals