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tds on service tax amount

abhay singh (student of ca final) (26 Points)

25 October 2008

Is tds deducted on the amount ofg service tax ? & please explain all provision under all section of TDS.

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6 Replies

S.Srinivasaraghavan (Chief Financial Officer and Co) (11318 Points)
Replied 26 October 2008

TDS has to be on gross amount including service tax.

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Pushkraj Sathe (Chartered Accountant) (203 Points)
Replied 26 October 2008

Dear Sirs,TDS can never be on the gross amount.The CBDT issues some circulars and we think that they are binding on the assessee,but no these circulars ,if any,are binding on the Tax Authorities.It is not the duty of CBDT to interpret the statute ,let the judiciary do it.

But........... Many Big companies follow what Mr Srinivasraghavan is advocating their logic is "to err on right side".To comply more than what law prescribes is yet not a crime in India so deduct as you like whether 12.36% or 36.12% till it is not below 12.36% you are right.

PANKAJ TRIVEDI (CHARTERED ACCOUNTANTS) (20 Points)
Replied 27 October 2008

Originally posted by :Guest

Recent Clarification is given only for TDS on Rent wherein we now have to deduct TDS on only the rent amount excluding TDS.

As far as other Payments like, Professional Payment is concerned we will have to deduct on total amount paid, i.e inclusive of Service Tax as old circular still stands

(Guest)

Hi Abhay...... TDS has to be deducted only on the gross amount of th bill which is inclusive of Service Tax. Recently CBDT says in case of Rent, Tax can be deducted exclusive of Service Tax. TDS on Professional Charges will be inclusive of Service tax.

Sudhindra S (Business) (21 Points)
Replied 13 December 2008

Hi,

An organisation has billed us Rs. 30,000 + Service Tax towards labour in a given month. We have not made payment to them for various reasons.

My question is while filing TDS returns, do I need to pay 2.26% even if I have not settled payment to our vendor.

I look forward to an answer for my question.

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Tinaz (132 Points)
Replied 15 December 2008

Originally posted by :Guest

Hi,
An organisation has billed us Rs. 30,000 + Service Tax towards labour in a given month. We have not made payment to them for various reasons.
My question is while filing TDS returns, do I need to pay 2.26% even if I have not settled payment to our vendor.
I look forward to an answer for my question.

TDS has to be deducted when the payment is made or the amount is credited to the account of the vendor whichever is earlier. hence TDS should be deducted & paid to the government. Non deduction of TDS is disallowed u/s 40a.