194 C
This query is : Resolved
18 March 2009
In TDS deduction 194 C says "Any person responsible for "PAYING ANY SUM" to any resident. Here "Sum" is stands for total bill amount or (If the service provider is charging service tax) it exclude service tax.
Please clarify.
Please clarify.
18 March 2009
IT does not include service tax
18 March 2009
IT includes service tax also. If however the contracter provides a separate bill for both the material and labour then TDS will be applicable for the labour portion.........
18 March 2009
It includes Service Tax Also. Any payment means any payment. For your information I would like to mention here that examption of service tax from TDS is only in case of Rent u/s 194I. In any other TDS sections there is no such exemption. TDS has to be deducted on the expenses amount inclusive of service tax.
18 March 2009
Sathis, you may confirm the answer given by Mr.Tarun.
18 March 2009
Quoting text of Taxmann web site
“ By the Finance Act 2007, Central Government has extended the levy of service tax on renting of property with effect from 1.06.2007. Under section 194-I of the Income-tax Act TDS have to be deducted by any person, who is responsible for paying to a resident any income by way of rent. So the question was whether TDS have to be deducted on rent, inclusive of service tax or exclusive of service tax. 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. But the CBDT has recently clarified to the query of Bombay Chamber of Commerce & Industry that TDS is also applicable on service tax portion in respect of
professional / technical fees payable u/s 194J. In this article the author has discuss the scope of TDS on Service tax under different provisions of Income tax Act, 1961.”
I’M ALSO QUOTING CONTENT OF PCC BOOK
“1.11 POINTS TO BE REMEMBERED WHILE PAYING SERVICE TAX
The following important points should be kept in mind while paying service tax:
♦Service tax is to be paid on the value of taxable services which is charged by an
assessee. Any income tax deducted at source is included in the charged amount.
Therefore, service tax is to be paid on the amount of income tax deducted at source also.
♦Where the amount of service tax is paid in cash, the date of payment is the date on
which cash is tendered to the designated bank”
It means that (for example if the amount of bill is Rs. 10000 TDS rate 5% and service tax rate is 10% ) following will happen
Amount of bill 10000
Less: tax deducted at source(@ 5% on10000) 500
Balance 9500
Add: service tax (@ 10000 * 10%) 1000
Finally amount of bill paybale inclusive of service tax (9500 + 1000) 10500
Hence in all cases excluding u/s 194J TDS shall be deducted exclusive of service tax
So for 194C sum does not include service tax.
Hope I make it clear to every one especially you
Plz inform me whether it is clear or not.
If u requires the link of Taxmann site inform me.
Regards……………………………………………………….!
“ By the Finance Act 2007, Central Government has extended the levy of service tax on renting of property with effect from 1.06.2007. Under section 194-I of the Income-tax Act TDS have to be deducted by any person, who is responsible for paying to a resident any income by way of rent. So the question was whether TDS have to be deducted on rent, inclusive of service tax or exclusive of service tax. 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. But the CBDT has recently clarified to the query of Bombay Chamber of Commerce & Industry that TDS is also applicable on service tax portion in respect of
professional / technical fees payable u/s 194J. In this article the author has discuss the scope of TDS on Service tax under different provisions of Income tax Act, 1961.”
I’M ALSO QUOTING CONTENT OF PCC BOOK
“1.11 POINTS TO BE REMEMBERED WHILE PAYING SERVICE TAX
The following important points should be kept in mind while paying service tax:
♦Service tax is to be paid on the value of taxable services which is charged by an
assessee. Any income tax deducted at source is included in the charged amount.
Therefore, service tax is to be paid on the amount of income tax deducted at source also.
♦Where the amount of service tax is paid in cash, the date of payment is the date on
which cash is tendered to the designated bank”
It means that (for example if the amount of bill is Rs. 10000 TDS rate 5% and service tax rate is 10% ) following will happen
Amount of bill 10000
Less: tax deducted at source(@ 5% on10000) 500
Balance 9500
Add: service tax (@ 10000 * 10%) 1000
Finally amount of bill paybale inclusive of service tax (9500 + 1000) 10500
Hence in all cases excluding u/s 194J TDS shall be deducted exclusive of service tax
So for 194C sum does not include service tax.
Hope I make it clear to every one especially you
Plz inform me whether it is clear or not.
If u requires the link of Taxmann site inform me.
Regards……………………………………………………….!
18 March 2009
IF any one has a doubt please inform me so that I can go deep in to the matter
regards.....................!
regards.....................!
18 March 2009
I am not convinced with your views. If you have some provisions or case laws or any circular to prove this then please let us know. I have read even commentries on this issue and had talked with senior level Income Tax officers (Not PCC level writers). It has been confirmed by them that All other sections of TDS are clear wrt amount for deduction of TDS. And you are also aware that we can not fight any case on the basis what the authors are saying. We can fight only on what the Law is saying. Language of sections is very clear. Even earlier in case of Rent, it was the same provision. But it was specially excluded by way of a circular. This circular could have exempt all payments in other sections too. Interpretations rules are clear that If something is specially excluded then it means that other things are inclusive..
19 March 2009
i an quoting the circular income and the available web site of as a proof that TDS SHALL NOT BE DEDUCTED on service tax
"
It has been re-clarified (this time correctly) by Income Tax Dept. that TDS not to be deducted on the amount of Service Tax being not in nature of income. Though the clarification has been issued only w.r.t. rent it applies to all [Circular No. 4/2008 Dtd 28.04.2008]"
go to web site
http://www.bizsolindia.com/update7.html
regards..................!
i an quoting the circular income and the available web site of as a proof that TDS SHALL NOT BE DEDUCTED on service tax
"
It has been re-clarified (this time correctly) by Income Tax Dept. that TDS not to be deducted on the amount of Service Tax being not in nature of income. Though the clarification has been issued only w.r.t. rent it applies to all [Circular No. 4/2008 Dtd 28.04.2008]"
go to web site
http://www.bizsolindia.com/update7.html
regards..................!
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