Tds on service tax on rent

[sunil jain]

In view of recent CBDT circular dt 28.4.08 reg non deduction of TDS on service tax on rent payment. In view of this logic I am of the view that TDS is not required to be deducted on service tax component on payment under any section 194C/194J & so on. Kindly give your view.

[Madhukar N Hiregange]

My vierw right from the starting has been that TDS on service tax. The fact that the CBDT has clarified in one reagrd ,in my view all ST need not suffer the cut.

Logically, it is right that TDS should be not applied on any Service tax/VAT components. But on the strict wordings of the provision, while 194I requires deduction of tax on 'payment for the use of land, building etc'., provisions of Sec.194C/194J requires deduction of tax on 'any sum' paid. Thus, it is better to have clear clarification from the Government for non-deduction of TDS on such cases.

AI Summary

TDS on service tax: service tax component should not be subject to withholding, but statutory wording needs clarification.
Whether TDS applies to the service tax component of rent and other payments is uncertain: administrative guidance supports non-deduction for service tax on rent, but differing statutory wording - rent-focused provisions referring to payment for use of land and other provisions referring to any sum - creates ambiguity, prompting a call for explicit governmental clarification to remove compliance risk.