Tds on service tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

13 August 2013 Hi,
my client wants to apply for service tax registration as the customers he is dealing with want to deduct TDS. But my client receipts are less than 10 lacs per annum.
As my client cant show service tax in invoices as he is exempted till 10 lacs, my query is how the customers are liable to deduct TDS if the invoice doesn't carry service tax.

Appreciate a quick reply.

Thanks in Advance.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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13 August 2013 Yes. TDS is not based on charging service tax or not in the invoice. it is governed by the Income tax act TDS sections. so based on nature of service, tds section and rate will apply. whether you are charging service tax or not is immaterial

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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14 August 2013 tds is deducted under income tax act under sec 192-196D depending on transaction.

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RENGARAJ R.K

RENGARAJ R.K (Expert)
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14 August 2013 Where TDS is applicable, service tax amount also will have to be added for calculating the TDS (except Rent).

Querist : Anonymous

Querist : Anonymous (Querist)

14 August 2013 Thanks for the reply..

As my client is exempted till 10 lacs, but still customers are asking for his service tax no.
As you have said that TDS depends on the transaction rather than the service tax charged then what could be the reason for customers asking for the service tax no.

Also for deducting TDS only PAN is required.

Please clarify.

Thanks in Advance

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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14 August 2013 Customers are not aware of the exemption about your client. he can inform client since the turnover is less than Rs.10 lakhs service tax not apply.

Service tax number they may ask for taking CENVAT credit purpose not for TDS purpose

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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14 August 2013 If the turnover exceeds Rs 9 lakhs then service tax reg becomes compulsory.