14 January 2014
It will depend upon under which section of Income Tax Act, TDS has been attracted.
If the section says that TDS has to be deducted on any sum paid, then TDS has to be deducted including service tax amount. For example as in the case of Sec 194C - Payment to Contractors & Subcontractors.
While if the section says that TDS should be deducted on the amount of "income" paid, then TDS is deducted after excluding the service tax amount. For example Sec 194D - Insurance Commission