Tds on service tax

This query is : Resolved

Hema Raviraj Ghadge (Querist)
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04 February 2015 Dear All

We have taken a professional service & received invoice for Amount including Service Tax for F,Y 2014-15.

I would like to know while making payment should TDS be deducted on Total Bill amount including Service Tax.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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04 February 2015 TDS on the amount excluding service tax.
Ref: CBDT Circular No. 1/2104 dated 13.1.2014.

Hema Raviraj Ghadge

Hema Raviraj Ghadge (Querist)
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04 February 2015 Thank You Sir, But if service tax amount is mentioned on Invoice and i.e Rs. 270000/- + service tax @12.36% Rs. 33372/-

Then to TDS should not be deducted on Service Tax

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CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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04 February 2015 Yes. TDS to be deducted on amount excluding service tax.

The CBDT has issued Circular No. 1/2014 dated 13.01.2014 pointing out that the Rajasthan High Court has taken the view in CIT(TDS) vs. Rajashthan Urban Infrastructure that if as per the terms of the agreement between the payer and the payee, the amount of service-tax is to be paid separately and was not included in the fees for professional services or technical services, no TDS is required to be made on the service-tax component u/s 194J of the Act. Pursuant thereto, the CBDT has decided in exercise of powers u/s 119 that wherever the terms of the agreement/ contract between the payer and the payee, the service tax component comprised in the amount is indicated separately, tax shall be deducted at source under Chapter XVII-B of the Act on the amount paid/payable without including such service tax component. Complete notification may be seen from below link--

http://law.incometaxindia.gov.in/DIT/Circulars.aspx