14 January 2009
but it can be argued that tax on tax can not be deducted ? is there any case where tds not made on service tax & such expenses are disallowed for short deduction ?
14 January 2009
Its a debatable point for a long time, but Income Tax Department has made it clear that tds is deductible on 'any payment made' to party. Like in section 194C, these words are clearly written, hence any payment made includes service tax also. The point of tax on tax is a very general point and has already been pointed out many times. But the department has given clarification for non deduction in matter of Rent only. Other sections are still untouched. I am not aware of any case law in this regard, but sure about the provisions and have read lots of discussion on this matter. Crux of these discussions is what i told you.
CAclubindia
