TDS on service tax, Service Tax

[DK AGGARWAL]

Dear Sir

We are issuing Service Tax Invoices on receiving commission charging ST @14%.with a request to deduct TDS on Commission amount only. But the party has deducted TDS on full amount including ST.

In the Income Tax statement 26 AS showing Commission and TDS, the amount reflected would be commission paid including ST which is not correct as per books as we have credited only commission.

Please clarify if TDS is applicable on ST amount.

D K Aggarwal

Posts / Replies

[CA Sumit Aggarwal]

Hi Mr. Aggarwal

TDS not to be deducted on Service Tax portion as per CBDT Circular No. 1/2014 dated 13th Jan, 2014.

Thanks

Sumit Aggarwal

[DK AGGARWAL]

Dear Sumit Ji

Thanks for the prompt reply

D K Aggarwal

[Manoj Agarwal]

Dear Sir,

The confusion regarding deducting TDS on Gross Bill Amount (including service tax) or on Service Value only has been put to rest by CBDT Circular No. 1/2014 dated 13-01-2014 which is extracted below:

"...The Board has decided that wherever in terms of the agreement/contract between the payer and the payee, the service tax component comprised in the amount payable to a resident is indicated separately, tax shall be deducted at source under Chapter XVII-B of the Act on the amount paid/payable without including such service tax component."

In my view, the circular is clarificatory in nature and is applicable retrospectively when the service tax is charged separately in the invoice.