Tds on service tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

13 May 2013 Is TDS has to be deducted on the amount of service tax u/s 194C.i.e inclusive of service tax is the amount of TDS calculation

please reply

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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13 May 2013 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. However, this analogy is not applicable to TDS under other sections.

In short--
For 194I - Deduct TDS on amount excluding service tax.
For other section - Deduct TDS on amount including service tax.

Querist : Anonymous

Querist : Anonymous (Querist)

13 May 2013 sir, the mention circular is giving the information about 194I please give me reference for 194C

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Guest

Guest (Expert)

14 May 2013 i think, there is no such circular, which
states that tds to be deducted on service tax amount u/s 194C.

u/s 194C, the words "Any person responsible for paying ANY SUM" are used
which means tds to be deducted on the sum paid to the contractor (inclusive of service tax)

Ganeshbabu K

Ganeshbabu K (Expert)
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16 May 2013 TDS on Service tax-Govt. view point

The CBDT vide Circular no.4/2008 dated 08-05-2008,

http://law.incometaxindia.gov.in/DIT/File_opener.aspx?page=CIR&schT=&csId=971b8564-fdc1-4d9e-9bbe-1b44a969643a&crn=4/2008&yr=ALL&sch=&title=Taxmann%20-%20Direct%20Tax%20Laws

announced that at the time of payment of rent, TDS should be deducted on the amount exclusive of service tax as the landlord is only acting as a collecting agent for Govt. for collecting service tax.
Therefore TDS on rent should be deducted on the amount without including service tax.

Based on the view point of the CBDT, the whole Industry stopped deducting TDS on service tax and started deducting TDS exclusive of service tax.

However, 2 months later vide Letter F.No.275/73/2007-IT(B) dated 30-06-2008.

http://law.incometaxindia.gov.in/Directtaxlaws/act2005/cirsec194J.htm

It was announced that the exemption from deducting TDS on Service tax is only under section 194I for the rent paid. And therefore TDS on service tax is liable to be deducted on all payments other than for rent paid.

this reply can be seen clearly and downloadable from

https://www.caclubindia.com/share_files/tds-on-service-tax-on-all-payments-except-rent-56695.asp

Ganeshbabu K

Ganeshbabu K (Expert)
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16 May 2013 As discussed above..

TDS ON SERVICETAX IS TO BE DEDUCTED EXCEPT FOR RENT(194I)