Regarding TDS
This query is : Resolved
16 November 2007
I received one service bill. whether Tds has to be deducted including service tax or excluding service tax? Please give the reference of section/any case law.
16 November 2007
tds has to be deducted excluding service tax
16 November 2007
service tax is different concept but tds is to be deducted on amount excluding service tax.
17 November 2007
The issue not seems to be solved. There are diffrent views on this issue. A large section (including bankers etc.)believes that service tax is part of "any sum by way of fees for professional services......"
It is a well settled proposition that, sales tax (if charged and accounted for separatley) is not a part of sales amount. In the same spirit service taxes should also to be interpreted and accordingly in my opinion too, TDS should be deducted on the fees excluding service taxes (if charged separatley).
I would like to welcome other views and reasonings.
It is a well settled proposition that, sales tax (if charged and accounted for separatley) is not a part of sales amount. In the same spirit service taxes should also to be interpreted and accordingly in my opinion too, TDS should be deducted on the fees excluding service taxes (if charged separatley).
I would like to welcome other views and reasonings.
18 November 2007
I personaly feel that,tds has to be deducted for the gross amount viz including service tax.
Whether there is any agreemnt between service receiver and service provider?if so,what it says regarding payments-if it says that service tax is seperate or as per the rate prevailing on the date of bill tds may not be deducted for service tax,if there is no such agreement or it says nothing about service tax,tds has to be deducted for the gross amount including service tax,
pl.see Circular 715 dated 8.8.1995-question no 8-though it is not directly related to service tax-it says that even reimbursement made for actual expenses cannot be deducted from bill amount for TDs.It means even for reimbursements you have to cut TDS.Hence I feel that,tds has to be dedcuted for service tax also.
Whether there is any agreemnt between service receiver and service provider?if so,what it says regarding payments-if it says that service tax is seperate or as per the rate prevailing on the date of bill tds may not be deducted for service tax,if there is no such agreement or it says nothing about service tax,tds has to be deducted for the gross amount including service tax,
pl.see Circular 715 dated 8.8.1995-question no 8-though it is not directly related to service tax-it says that even reimbursement made for actual expenses cannot be deducted from bill amount for TDs.It means even for reimbursements you have to cut TDS.Hence I feel that,tds has to be dedcuted for service tax also.
19 November 2007
I have still doubts:-
01. Intention behind the provision of TDS is to deduct taxes on the income of the deductee. Service taxes collected by deductee can not be a part of income of the deductee by any strech of imagination.
02. Some cases are there that, vendor are charging sales taxes (VAT) on their bills, which fallks under the purview of section 194C. If we follow the same, criteria, one will also have to deduct TDS on sales taxes/VAT. Whereas as per accounting standard VAT collected is not at all a part of sales/ turnover.
03. Question No. 8 as referred by Ld. respondent is as follows:-
Question 8 : Whether section 194C would be attracted in respect of payments made to couriers for carrying documents, letters, etc. ?
Answer : The carriage of documents, letters, etc., is in the nature of carriage of goods and, therefore, provisions of section 194C would be attracted in respect of payments made to the couriers.
I can not find any such relation of the said question with the present case.
Main question is, whether the phrase "any sum by way of fees for professional services" will include service taxes? Whether tax will be a part of fees?
01. Intention behind the provision of TDS is to deduct taxes on the income of the deductee. Service taxes collected by deductee can not be a part of income of the deductee by any strech of imagination.
02. Some cases are there that, vendor are charging sales taxes (VAT) on their bills, which fallks under the purview of section 194C. If we follow the same, criteria, one will also have to deduct TDS on sales taxes/VAT. Whereas as per accounting standard VAT collected is not at all a part of sales/ turnover.
03. Question No. 8 as referred by Ld. respondent is as follows:-
Question 8 : Whether section 194C would be attracted in respect of payments made to couriers for carrying documents, letters, etc. ?
Answer : The carriage of documents, letters, etc., is in the nature of carriage of goods and, therefore, provisions of section 194C would be attracted in respect of payments made to the couriers.
I can not find any such relation of the said question with the present case.
Main question is, whether the phrase "any sum by way of fees for professional services" will include service taxes? Whether tax will be a part of fees?
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