TDS - Does The Tds Calculation Include Services Tax Amount Also

Dear Mr. Banerjee Sir,
We provide manpower services on contracts and we are proprietary Firm .Kindly elaborate the tds and service tax rates/applicability in relation to -
1)Contracting with proprietary firms.
2)Contracting with pvt Ltd & Ltd, Companies,
3)Residential and co-op societies
4)Hospitals and education institutes.
5)Clubs and NGOs
Recently I came across a hospital client stating we are exempted from esic because its hospital. is it so? How can we extend benefit to our manpower in such case.Will the hospital be able to provide insurance cover /disability benifit etc.

For manpower services, you come under contractor in tds rules.

So if you are a direct contractor, they will deduct 2% of bill amount.

If you are a subcontractor, the main contractor is required to deduct 1%

Proprietory firms with turnover of less than 40 Lakhs a year (I think now increased to 1 cr) need not deduct tds from your payments.

Current rule is that tds will be deducted on the gross bill before service tax. Earlier it was on total bill amount.

If you are covered under ESIC, and the location where employees are posted are also covered under esic, then you need to pay esic irrespective of who the principal employer is. So, even if the hospital them selves were not covered in esic, you still need to pay for your employees.

As per rules, the hospital can get exemption for you, but it's a very time consuming process. Further, what happens when an employee is shifted for that location to another location ? I do not think it's a good idea to go the exemption rule.

Hope I have answered your question

Also please note that service tax is applicable on an uniform rate of 12.36% on all invoices you raise.
However, in case of customers who are companies, the reverse charges rule applies. Under that rule, the company will pay the service tax directly on your bill and you need not charge the same. If you already have service tax number and charge directly, inform the company of the same so they don't pay in addition.