We have hired a contractor for company production work. His monthly bill is around 4 lakhs. What will be the deductions from his bill? Does he need to have his own service tax number? If yes, please tell me the procedure for registering for a service tax number.
From India, Kolhapur
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3From India, Kolhapur
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If the contractor's turnover is more than 8 lakhs, he is required to raise the service tax. If the contractor's invoice is raised for 4 lakhs, it must be summed up with 10.30%. The total amount to be paid to him is after deducting 10% of income tax.
Example Calculation
For example:
The actual amount is 100.00
Service Tax: 10.30
Total: 110.30
Amount to be paid = 110.30 - 11.03 = 99.27
The deducted TDS must be paid to the IT department monthly. At the end of the year or half-yearly, issue Form 16A.
From India, Delhi
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Example Calculation
For example:
The actual amount is 100.00
Service Tax: 10.30
Total: 110.30
Amount to be paid = 110.30 - 11.03 = 99.27
The deducted TDS must be paid to the IT department monthly. At the end of the year or half-yearly, issue Form 16A.
From India, Delhi
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I don’t think TDS (I.T) on Sevice Tax. It should be on Rs.100. I am not tax expert, check. Pon
From India, Lucknow
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From India, Lucknow
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It will be deducted as TDS 10%. if sub vendor or job worker then 2% . on above calculation no matter if having service tax number or not. But TDS certificate should be issued in next month.
From India, Mumbai
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From India, Mumbai
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Can anybody able to give a clear explanation for the above issue???? which would be useful for everyone..........
From India, Tirunelveli
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From India, Tirunelveli
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Tax Deduction Clarification
IT is deducted after the sum with Service Tax (S.T.). This has been cross-checked with the department, and they found it correct. TDS of 2% is only applicable if it is certified by the IT Department. This is what I experienced.
The latest update is to pay Service Tax in advance, i.e., simultaneously with the raised invoice.
From India, Delhi
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IT is deducted after the sum with Service Tax (S.T.). This has been cross-checked with the department, and they found it correct. TDS of 2% is only applicable if it is certified by the IT Department. This is what I experienced.
The latest update is to pay Service Tax in advance, i.e., simultaneously with the raised invoice.
From India, Delhi
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I dont think TDS is applicable on service tax. Some companies do deduct TDS incl of service tax. The well informed can clarify.
From India, Bangalore
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From India, Bangalore
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The mentioned contract is a Production contract and attracts TDS at 2% if the contract is with a company or 1% if it is with an HUF or an individual. Sales Tax (ST) is inclusive only of 194I rent payment; ST should be excluded. Therefore, deduct 2% on the principal amount + ST. ST registration and all details are the contractor's responsibility. If the contractor levies ST, deduct TDS along with the ST amount. If the contractor does not charge ST, then leave it and deduct only on the invoice amount. Basically, deduct based on the invoice value alone, but ensure that his PAN No. is mentioned on the invoice.
Regards,
Narayanan
From India, Bangalore
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Regards,
Narayanan
From India, Bangalore
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You have to pay Service Tax to the contractor as he is providing you with his Service Tax Number. The PAN Number and Service Tax must be mentioned on the bill. TDS must be deducted on the gross amount, including Service Tax, and it should be 2% if a partnership or Pvt. Ltd. firm and 1% if a proprietorship company. You do not need to register yourself in Service Tax as this compliance is for the contractor since he is providing you a service, so it is his responsibility to deduct the service tax.
Regards,
Deepak Vig
[Phone Number Removed For Privacy Reasons]
From India, Delhi
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Regards,
Deepak Vig
[Phone Number Removed For Privacy Reasons]
From India, Delhi
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Mr. Deepak has correctly answered the question. Only one thing I would like to add to it: the rate of TDS depends on the nature of the service offered by the contractor. If the nature of the service offered by the contractor involves the use of his skill or intellect, then TDS has to be deducted at 10% under section 194J. Otherwise, TDS will be at 1% or 2% (section 194C) depending on the status of the contractor (Deductee).
Regards,
Ravindra
From India, Bangalore
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Regards,
Ravindra
From India, Bangalore
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TDS on service tax - CBDT clarification 13.1.2014.pdf
PT,ESIC,TDS,FBT ,S[1][1].Tax Calculator.xls