Manpower Services on Contract: TDS and Service Tax Clarification
It relates to manpower services on contract, where an agency provides manpower to a client on a contractual basis. When invoicing is done, service tax is included and submitted. While the major part of the invoice amount is the salary component, the client deducts TDS on the entire invoice amount, including the service tax.
I would like to know if this is correct. My question is, except for the service charges, the rest of the invoice amount being the salary component, how is it justified that TDS is deducted? Also, when service tax is included in the invoice, how is TDS applied to the service tax amount if it is not part of the agency's income?
I appreciate experts to please comment and simplify.
From India, Vadodara
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382It relates to manpower services on contract, where an agency provides manpower to a client on a contractual basis. When invoicing is done, service tax is included and submitted. While the major part of the invoice amount is the salary component, the client deducts TDS on the entire invoice amount, including the service tax.
I would like to know if this is correct. My question is, except for the service charges, the rest of the invoice amount being the salary component, how is it justified that TDS is deducted? Also, when service tax is included in the invoice, how is TDS applied to the service tax amount if it is not part of the agency's income?
I appreciate experts to please comment and simplify.
From India, Vadodara
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Hi,
Normally, the TDS deduction is to be done on the amount before the Service Tax. Since the agreed amount is a contract amount, the party is liable to deduct tax on the salary amount. You can get a refund of the same by filing an IT Return, showing your individual income/profit originally. If you want more details, please write to me.
Regards,
REJI
From India, Kottayam
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Normally, the TDS deduction is to be done on the amount before the Service Tax. Since the agreed amount is a contract amount, the party is liable to deduct tax on the salary amount. You can get a refund of the same by filing an IT Return, showing your individual income/profit originally. If you want more details, please write to me.
Regards,
REJI
From India, Kottayam
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