Tds & service tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

09 May 2013 is it necessary that when service tax is charged tds has to be deducted.
there is a lot of confusion with regard to when is service tax to be charged on income.
if service tax is charged by service provider in their bill is it necessary to deduct tds.
how to perfectly keep in grip when is service tax & tds obligation arising and how to avoid statutory defaults.

expert please reply to the query.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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10 May 2013 1. The first thing you have to do is determine the nature of the service and classify it as one of the following:

(a) Rent - 194I
(b) Contractor - 194C
(c) Professional - 194J

2. Thereafter determine whether the amount of expense exceeds the maximum amount as permitted under the respective section, which is as under:

(a) Rent - Rs. 1.8 lakhs per annum (EXCLUDING SERVICE TAX).

(b) Contractor - Rs. 30,000 in respect of single invoice or Rs. 75,000 in aggregate throughout the year.

(c) Professional - Rs. 75,000 (whether single invoice or aggregate throughout the year).

3. TDS will be deducted only if the amount exceeds/or is expected to exceed the above amounts.

4. TDS on rent will be deducted only on the RENTAL AMOUNT and NOT on the service tax amount.

TDS u/s 194C and 194J will be deducted on the total bill amount INCLUDING service tax.

Hope this clears up the matter.

Message likes : 1 times

Querist : Anonymous

Querist : Anonymous (Querist)

12 May 2013 sometimes service tax is charged on bank charges for say stop payment. this was my question,on commission service tax is charged and likewise many other income which cant be classified under 194C-I-J.
HOW TO DETERMINE ON WHICH INCOME SERVICE TAX IS CHARGED OR NOT.

PLEASE REVERT

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C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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13 May 2013 Your question has been replied from Income Tax Angle. As regards service tax is concern you have to determine whether the service provider has charged service tax or not if he has charged service tax then you have deduct TDS on the whole amount except in case of Rent otherwise you have to deduct TDS only on the amount for which the bill has been submitted by the service provider due to below the limit of 10 lacs for services rendered by him.