Suppose If i a m service provider and i raised the bill of Rs. 50000/- and my debtors give me 20000 out of which 2000 TDS deducted and 1000 deducted as Security Deposit.
Then at what amount service tax should be paid whether on 20000 or net payment received i.e 20000-2000-1000 = 17000/-.
17 September 2010
ST is payable on the receipt of money. So ST payable on Rs. 19000/-. Since TDS is nothing but deferred income it has to be grossed up though not received.
17 September 2010
Rs. 1000 is kept as security deposit , not deducted by party. If he pay full amount, then you have to pay Rs.1000 to him security deposit, HEnce you are receiving Rs. 20000 against your bill. Hence Service tax to be paid on Rs. 20000/-
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