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Tds on gross serviceable amount?

Jalpesh Maniyar (CA Final Student) (225 Points)

21 March 2013

Dear Members,

I had a small query regarding TDS is deductible u/s. 194C on the entire consideration including Service Tax. May i know the reason for deducting TDS on Service Tax too.????

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Deepak Gupta (CA Student) (15922 Points)
Replied 21 March 2013

Originally posted by : Jalpesh Maniyar
	Dear Members, I had a small query regarding TDS is deductible u/s. 194C on the entire consideration including Service Tax. May i know the reason for deducting TDS on Service Tax too.????

TDS u/s 194C is required to be made on the entire sum which includes service tax for the reason that the word used is 'any sum' and not 'any payment of income'.
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For Information Purpose:

Only TDS u/s 194I would be required to be made on the amount of rent paid/payable without including the service tax - Circular No. 4/2008, dated 28-4-2008 and the scope of this circular cannnot be extended to payments u/s 194J (Letter F.No. 275/73/2007-IT(B), dated 30-6-2008.)

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Jalpesh Maniyar (CA Final Student) (225 Points)
Replied 21 March 2013

Ok, can you clear my further doubt regarding the same

If a Contractor has raised say Rs.100 bill and service tax over that Rs.12 (being rate at 12%)

Now one total bill of Rs.112/-, company will deduct TDS

so, in my opinion Rs.100/- is the service contractor has provided and not Rs.12/-

Rs.12 is a service tax chargeable on serviceable amount the same contractor is to collect from company and to deposit to Govt

if the Rs.12/- will also come net of service tax, contractor is to bear the same from his pocket here in this case .24 paise will be TDS (assuming TDS @ 2%.)

Why so?????