Tds on service tax under reverse mechnism

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

25 July 2012 Recently notification 30/2012 has been issued for applicability of reverse charge under service tax w.e.f. 01.07.2012. Whether tds u/s 194C will be applicable on service tax portion of service receiver for which service provider is not responsible? Relevent reference may be given pl.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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25 July 2012 as per amendment changes only service tax, there is no change in TDS deduction under income tax. so need to deduct TDS inclusive of service tax only.

CA Dileep Surya Kumar

CA Dileep Surya Kumar (Expert)
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25 July 2012 In case of reverse charge method TDS should be deducted on the amount payable or paid to the service provider inclusive of service tax borne by service provider to extent specified under said notification 30/2012 .

If 100% service tax payable by the service recipient (Ex. transport of goods by road and payment to lawyers etc.)then no need to include the same.

In case of reverse charge, service receiver directly remit the service tax to the government with out paying the same to the service provider.

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Suresh Mittal

Suresh Mittal (Expert)
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25 July 2012 In my opinion TDS should be deducted on amount inclusive of service tax, because service provider would either include service tax and then deduct Sr Tax payable by SR or would mention the Service tax payable by SR, in the invoice.