TDS Erection and commissioning invoice with out service tax

[Asked by Guest]

Sir, Thanks for your reply, Now query is that, whether Bangalore party will deduct the TDS for Erection and commissioning invoice with out service Tax . Please advice.

Regards

V.Sridhar

[KASTURI SETHI]

In your case, ST is not leviable. Why the question of TDS without ST ? In any case, where ST is leviable, the amount of TDS is also to be included into the taxable value for the purpose of discharging liability of ST. However, the issue of TDS pertains to Income Tax Act and Income Tax is not my area.

[Ganeshan Kalyani]

Sir, CBDT clarifies that TDS is deductible on amount before service tax. Thanks.

[Ganeshan Kalyani]

Sir, as rightly said by Sri Kasturi Sir, that service tax is not leviable, then TDS as applicable will be deducted on invoice amount. Thanks.

[KASTURI SETHI]

Sh.Ganeshan Kalyani Ji,

 

Pl. refer to your reply dated 3.6.2016. Will you please post CBDT's circular or notification or any other authority in this context that TDS is deductible before arriving at the amount of ST to be paid ?

 

Thanks.

[KASTURI SETHI]

Sh.Ganeshan Kalyani Ji,

As per Section 67, Service Tax is leviable on the gross amount charged. As per the explanation of term, 'Gross Amount Charged' under Section 67, TDS should form part of taxable value for the purpose of payment of ST.

Do you agree,Sir ?

 

Thanks & regards.

 

 

 

[Ganeshan Kalyani]

CBDT Circular No. 01/2014 dated 13.01.14.

[Ganeshan Kalyani]

Sir TDS is deducted from the gross amount before making payment to vendor. Thus Sri Kasturi Sir I agree with you that TDS is part of gross amount charged. Thanks.

[KASTURI SETHI]

Dear Sir,

CBDT's circular is very useful for me. It becomes easy to convince my client, if any person argues. I CBEC's circular regarding this issue. Many many thanks.

[KASTURI SETHI]

Pl. read 'I have CBEC's circular'

AI Summary

Tax Deduction at Source: deduct TDS on the invoice amount before service tax per CBDT guidance, Section 67 implications noted.
Where service tax is not leviable, TDS is deductible on the invoice amount payable; CBDT guidance indicates TDS is deductible on the amount before service tax. Conversely, when service tax is leviable, Section 67 treats the gross amount charged as including TDS, so TDS forms part of the taxable value for service tax purposes.