Tds on machinery hire service tax

This query is : Resolved

Nagesh Naik (Querist)
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07 February 2012 Sir,

In Machinery Hire Charges we are paying Service Tax. When we deduct the TDS is it applicable on Full Amount(Hire Charges + Service Tax) or only on Hire Charges

Kindly do the needful.

CA. Hari Kishan

CA. Hari Kishan (Expert)
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07 February 2012 TDS shall be deducted on the gross amount charged i.e hire charges + plus service tax amount.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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07 February 2012 TDS to be deducted on amount excluding service tax.

TDS to be deducted u/s 194I.

As per Circular No.4/2008 dated 28.4.2008, it was clarified that TDS on rental payments would be required to be made only on the basic rental amount without including service tax. In other words, TDS should not be made on the service tax portion of the rent. This circular is applicable only for payment u/s 194I.

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