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TMI BlogTDS on Service tax paid on reverse charge paid to advocatesX X X X Extracts X X X X X X X X Extracts X X X X ..... We have paid legal fees to our advocate amounting to Rs.100000/-. We have deducted TDS under section 194J @ 10% on Rs.100000/-. Our chartered accountant is adamant that TDS is required to be deducted on Service Tax component paid under reverse charge mechanism. As per my understanding TDS is required to be deduted on the gross amount charged by service provider. In this case, the gross bill is o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly Rs100000/-. Kindly guide whether my position is right or not? - Reply By Rachit Nagpal - The Reply = TDS should be deducted on the amount which you are liable to pay and in the case of Reverse Mechanism you are not liable to pay the service tax amount to the service provider.So you are right as you need not required to deduct TDS on the Service tax portion as this should be paid by you ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under service Tax Mechanism. - Reply By surendranadhan tvd - The Reply = Please refer the judgment of the Hon ble Rajasthan High Court, in the case of Commissioner of Income Tax (TDS), Jaipur Vs. M/s. Rajasthan Urban Infrastructure [2013 (8) TMI 12 RAJASTHAN HIGH COURT] on following issue: Issue: Whether TDS is to be deducted on the amount of Service Tax charged on professional/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... technical fees under Section 194J of the Income Tax Act, 1961 ? F act s Background: M/s Rajasthan Urban Infrastructure Development Project ( the Respondent or the RUIDP or the assessee ) is a project of Government of Rajasthan for the Infrastructure Development and Civic Amenities in the specified areas/ cities in the state of Rajasthan. The RUIDP appoints the technical and p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roject consultants and deducts income tax at source from the amount of fee payable as per the agreement and deposit the same as per the relevant provisions of the Income Tax Act, 1961 ( the Income Tax Act ) and subsequently files the return for the same within due time. The Assessing Officer, vide its order dated 30.01.2009 raised a demand of Rs. 1,70,881/- along with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest thereon amounting to Rs. 44,776/-, on account of TDS on the amount paid as Service Tax pertaining to Financial Year 2005-06. The assessee preferred an appeal before the Commissioner of Income Tax (Appeals), Jaipur which was allowed. Being aggrieved with the same, the Revenue filed an appeal before the Income Tax Appellate Tribunal, Jaipur but the same was dismis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed. Hence the revenue preferred an appeal before the Hon ble Rajasthan High Court. H e ld: It was held by the Hon ble Rajasthan High Court that if Service tax is payable in addition to professional/ technical fees under the contract, the withholding tax will be restricted to the professional fees. Hence, examination of contract terms is imperative The Hon ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rajasthan High Court held that the words any sum paid used in Section 194J of the Income Tax Act, 1961 , relate to fees for professional services or fees for technical services . In terms of the agreement, the amount of Service Tax was to be paid separately and was not included in the fees. Hence the orders passed by Appellate Authority as well as the Appellate Tribunal are in ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cordance with the provisions of Section 194J of the Income Tax Act, 1961 . - TDS on Service tax paid on reverse charge paid to advocates - Query Started By: - jatin Gandhi Dated:- 26-8-2013 Income Tax - Got 2 Replies - Income Tax - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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