in case of payment to advocate fees,as reverse applicable so while calculating TDS on which amount we need to deduct TDS, weather including service tax or excluding service tax.
14 Replies
CA Pooja Agarwal
(Chartered Accountant)
(3228 Points)
Replied 01 October 2012
it should be including tds
CA D.C. Bansal
(Accounts Head)
(283 Points)
Replied 01 October 2012
In my opinion, TDS should be decucted on fees only not on service tax.
DHARMENDRA SHARMA
(Senior staff)
(444 Points)
Replied 01 October 2012
Section 194J says that TDS should be deducted on the amount Credited or Paid.
So,TDS in case of Reverse Charge Mechanism should be made on the amount paid or credited excluding ST.
because Service tax will be paid by us to Central Govt.,not to Advocates.
Readers Please comment if i am wrong.
CA Pooja Agarwal
(Chartered Accountant)
(3228 Points)
Replied 01 October 2012
amount credited/paid includes ST
DHARMENDRA SHARMA
(Senior staff)
(444 Points)
Replied 01 October 2012
Yes,Pooja you are right but only if Service tax is collected by Advocates.But as per reverse charge mechanism,ST is paid by us and it is our expense.
CA PRAVEEN SINGH
(MANAGER ACCOUNTS)
(2277 Points)
Replied 01 October 2012
| Originally posted by : pooja | ||
 |
it should be including tds |
 |
YES AGREE WITH POOJA..
DHARMENDRA SHARMA
(Senior staff)
(444 Points)
Replied 01 October 2012
Praveenji,please read question first.
He is asking about including ST or Excluding ST.
vijay Raturi
(Senior Associates)
(29 Points)
Replied 01 October 2012
In my opinion TDS should be deducted Amount Paid/Credited .
In the reverse charge case it should be excluding Service tax whether we are treating Service tax paid as a Expenses or Curent Assets.
Kolluru Krishna Murty
(Partner)
(315 Points)
Replied 01 October 2012
The reverse charge mechanism is for liability of Service Tax and not I.T.
The credit or payment to the advocate is only fees and the payment ST liability is not a credit to the party and an independent liability of the service receipant.
So TDS should be only on Fees and not on ST portion.
kkm
Sunil
(Trader)
(2611 Points)
Replied 03 February 2013
TDS cannot be included as you are directly crediting the Service Tax Account in the books and in your P&L Account you are debiting the account head for which the expense is supposed to be. At no point of time are you paying or crediting the account of the service provider. The service tax is not a part of the turnover of the service provider in reverse tax mechanism. The service tax is not even included in receivers account for calculating the turnover of section 44AB. If any tax is deducted, it would be a wrongful deduction.
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