26 August 2008
As per CBDT Circular No tds has to be deducted on service tax on rent paid. because service tax is not a income of the person who is receiving rent.
If this is the case then how the tds can be recovered on service tax charged on contract, Professional fees, commission etc., In these case also the person is acting as agent of government.
The person is collecting service tax from the clients and paying to the government just like rent. Service tax is not a income of the person.
I think this decision should be challege in court and there should rule that tds should not be charged on service tax of all categories.
CAclubindia
