tds on wt amount...!!

Hello Frds...
This problem arose during the course of audit of one of the famous hotel ......The contractor submitted the bill of  amount  Rs 845000 and specifically mention that 80% of the above  is material cost and rest 20% is service charges and also Charge VAt on such 80% amount related to material and charge service tax on Such 20% amout which is its service charges. ...on what amout Tds shoud be deducted .....
lets take imaginary figs...
bill amount --                                                            845000
Add: VAT(12.5% of 80% of 845000) =                  84500
Add: Service Tax (10.3% of 20% of 845000) =    17407
                                                                      --------------------------------
total amount                                                              946907
                                                                      -------------------------------- 

In My Opinion you should take the whole amount for TDS purposes........