Ref cbdt circular ...tds on service tax component
This query is : Open
25 June 2014
ref to the cbdt circular dated 13.01.14 where it was clarified that no tax to be deducted on SVC tax in case of 194J. would like to clarify is applicability is for 194C also. Means any payment to resident in such case TDS will not be on the service tax component
25 June 2014
yes...any payment to resident wherein the service tax amount is separately provided on the invoice, tds shall not be applicable on the service tax portion
25 June 2014
as per circular 1/2014 as follows
CHAPTER XVII-B OF THE INCOME-TAX ACT, 1961 - COLLECTION AND RECOVERY OF
TAX - DEDUCTION AT SOURCE - CLARIFICATION REGARDING TDS UNDER CHAPTER
XVII-B ON SERVICE TAX COMPONENT COMPRISED OF PAYMENTS MADE TO
RESIDENTS
CIRCULAR NO. 1/2014 [F.NO.275/59/2012-IT(B)], DATED 13-1-2014
The Board had issued a Circular No.4/2008 dated 28-04-2008 wherein it was clarified that tax is to be
deducted at source under section 194-I of the Income-tax Act, 1961 (hereafter referred to as 'the Act'),
on the amount of rent paid/payable without including the service tax component.
Representations/letters has been received seeking clarification whether such principle can be extended
to other provisions of the Act also.
2. Attention of CBDT has also been drawn to the judgement of the Hon'ble Rajasthan High Court dated
1-7-2013, in the case of CIT (TDS) Jaipur v. Rajasthan Urban Infrastructure (Income-tax Appeal
No.235, 222, 238 and 239/2011), holding that if as per the terms of the agreement between the payer
and the payee, the amount of service tax is to be paid separately and was not included in the fees for
professional services or technical services, no TDS is required to be made on the service tax
component u/s 194J of the Act.
3. The matter has been examined afresh. In exercise of the powers conferred under section 119 of the
Act, the Board has decided that wherever in terms of the agreement/contract between the payer and the
payee, the service tax component comprised in the amount payable to a resident is indicated separately,
tax shall be deducted at source under Chapter XVII-B of the Act on the amount paid/payable without
including such service tax component.
4. This circular may be brought to the notice of all officer for compliance.
■■
CHAPTER XVII-B OF THE INCOME-TAX ACT, 1961 - COLLECTION AND RECOVERY OF
TAX - DEDUCTION AT SOURCE - CLARIFICATION REGARDING TDS UNDER CHAPTER
XVII-B ON SERVICE TAX COMPONENT COMPRISED OF PAYMENTS MADE TO
RESIDENTS
CIRCULAR NO. 1/2014 [F.NO.275/59/2012-IT(B)], DATED 13-1-2014
The Board had issued a Circular No.4/2008 dated 28-04-2008 wherein it was clarified that tax is to be
deducted at source under section 194-I of the Income-tax Act, 1961 (hereafter referred to as 'the Act'),
on the amount of rent paid/payable without including the service tax component.
Representations/letters has been received seeking clarification whether such principle can be extended
to other provisions of the Act also.
2. Attention of CBDT has also been drawn to the judgement of the Hon'ble Rajasthan High Court dated
1-7-2013, in the case of CIT (TDS) Jaipur v. Rajasthan Urban Infrastructure (Income-tax Appeal
No.235, 222, 238 and 239/2011), holding that if as per the terms of the agreement between the payer
and the payee, the amount of service tax is to be paid separately and was not included in the fees for
professional services or technical services, no TDS is required to be made on the service tax
component u/s 194J of the Act.
3. The matter has been examined afresh. In exercise of the powers conferred under section 119 of the
Act, the Board has decided that wherever in terms of the agreement/contract between the payer and the
payee, the service tax component comprised in the amount payable to a resident is indicated separately,
tax shall be deducted at source under Chapter XVII-B of the Act on the amount paid/payable without
including such service tax component.
4. This circular may be brought to the notice of all officer for compliance.
■■
26 June 2014
no tax is required to be deducted at source on service tax portion...
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