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TDS & Service Tax Advice

12 June 2007

Dear Friends kindly see the case and advice:

Inspection of machinery was done by R ltd.

J ltd. paid the inspection charges(including service tax) and got it reimbursed from U ltd.

While making payment (reimbursement ) to J ltd whether TDS is to be deducted and whether credit for service tax can be availed by J ltd. or U ltd.

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9 Replies

Narendra Sarawagi (ca) (22 Points)
Replied 13 June 2007

TDS TO BE DEDUCTED BY BOTH COMPANIES.J LTD SHOULD RAISE THE INVOICE ON U LTD AND SERVICETAX WILL BE RECOVERABLE BY ULTD.SUBJECT TO J LTD IS REGISTERED WITH SERVICE TAX

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ajay (service) (31 Points)
Replied 15 June 2007

a) First Case R Ltd raise the invoice on J Ltd than, J Ltd raise the invoice or debit note on U ltd for reimbursement In such case U Ltd will deduct the TDS. CENVAT can be availed by U Ltd subjected that J Ltd is registered under CENVAT and Charged to U Ltd. b) if J Ltd is register u/r excise and U Ltd not register u/r excise in such case, neither J Ltd nor U Ltd can avail the cenvat credit. further U Ltd will deduct the TDS on Gross Invoice or Debit Note value as per I.T Circular. c) if J Ltd is not register u/r SErvice Tax and U Ltd is register u/r excise in such case U Ltd cannot avail the CENVAT since, contract is with J Ltd and not with R Ltd. but TDS will be deducted at Gross Value.

Dilip Darji (392 Points)
Replied 16 June 2007

(1) If R has issued Excise Invoice and J is using the service in the manufacture of Excisable goods or taxabe output Service, J is entitled to avail Service Tasx Credit. (2) If J is not providing any out put Service to U, and simply getting reimburshment of Service Tax paid by him to R from U,U shall not be entitled to avail CENVAT Credit. The reason is that J is not paying Service Tax to Govt.J is getting reimburshment from U.In absence of providing any Service to U, J cannot issue excise invoice.

Bharath Jain (Article Assistant Student) (58 Points)
Replied 18 June 2007

service tax: wheather service tax has to be charged at current rate for incomes of the years 2001,02,03,04..

Chandan B.patel (CA Practice ) (35 Points)
Replied 18 June 2007

KINDLY SEND ME NEW SERVICE TAX SECONDARY & HIGHER SECONDARY EDUCATION CESS CODE.

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Rohit Kumar Bhalotia (Chartered Accountant) (19 Points)
Replied 16 July 2007

Hi, Regarding this query more clarification required. 1st what is relation between these two companies. 2nd why reimbursement happening . 3rd which compny assets inspection done. What is nature of business of both company. Thanks Rohit

sandeep (service) (41 Points)
Replied 29 October 2007

pls help me in this if a tax invoice is including service tax eg: rent of immovable property -1,76,000.00 P.M. Service tax 12.36% 21,754.00 Total Amount 1,97,754.00 chq comes with deduction of TDS 16.995% wht amount should I pay to the service tax depart while filling the service tax returns & also the TDS part. pls help me in this as Iam not aware abt the payment. Urgent wht amount

CA Gnanika (CA ) (485 Points)
Replied 05 November 2007

sir According to me i feel that TDS is nothing but Loans & Advances i.e , it is an asset to u , it is good as u have recd that amount, so when u have to pay service tax , u have to calculate on the amount recd + tds & remit it to the govt

Ganesh Sahadev (sdf) (25 Points)
Replied 03 December 2008

Can service tax credit be availed on reimbursement of expenses by the company.

Eg: Telephone expenses reimbursed by company "A Ltd" to employee Mr.Z can company "A Ltd" avail service tax charged in telephone bill in the name of the employee by reimbursing the telephone exp to employee.

Kindly provide some Section/Clarification/Circular etc for my reference