TDS on Service Tax section 195 require or not

[bhuvnesh gupta]

TDS on Service Tax of Foreign Payments require to deduct or TDS require to deduct on Gross amount.

thanks

Bhuvnesh Gupta

[Ramanujam Varadarajan]

In my view, if the payment is made to foreign service provider on grossing up basis, there would not be any service tax levy on TDS portion as it neither form part of bill nor TDS certificate will be issued to foreign service provider.  A decision (granting stay) on this issue reported in 2010-TMI-35461 can be referred.

[Guest]

As per section 195 tds should be on gross amount not on net amount

AI Summary

TDS on service tax: whether withholding applies to gross payments or may exclude grossed-up service-tax components. Whether TDS must be deducted on payments to foreign service providers on a gross or net basis. One position holds that when payment is made on a grossing up basis the service-tax portion need not be subjected to TDS because it is not part of the invoiced bill and no TDS certificate is issued. The contrasting position maintains that TDS must be calculated on the gross amount of the payment, not after deducting service tax.