Tds/serveice tax

This query is : Resolved

Nitesh Namdev (Querist)
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13 January 2012 Hi experts

This is nitesh namdev, i am accountant in furniture retail showroom.
1. what is the meaning of abatement in case of service tax.

2. what is the tds entry in case we hired a consultant for our software modified and pay every month 60000/-.

3. its a rule of tds on subcontractor or contractor, we deduct tds on ist time bill worth rs 30000/- or total of invoices in a year 75000/- , but we received ist bill 25000/- on july, 25000/- on august, 20000/- on september, 28000, on december. can i deduct tds on 28000/- on december bill and which amount may be deduct.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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12 May 2012 1. Abatement means a deduction of specific percentage is provided from the service tax. For eg. in case of GTA, there is a service tax abatement of 75%.

2. Expense A/c Dr
To TDS on Professional
To Consultant A/c
(Being TDS deducted)

TDS on Professional A/c Dr
To Bank A/c

3. Since with the bill of Rs. 28,000 the total amount exceeds Rs. 75,000, TDS will be deducted on the total amount of Rs. 98,000.

However, it is advisable to deduct TDS on each and every bill if the amount to be paid is expected to cross Rs. 75,000.