Wednesday, August 6, 2008

TDS ON SERVICE TAX U/S 194-J ON PROFESSIONAL & TECHNICAL FESS


on Wednesday, August 6, 2008

A clarification has been sought by Bombay Chamber & commerce & Industry regarding applicability of circular 4/2008 on section 194-J ,and asked the department that whether TDS is to be deducted on service tax collected on the service tax portion collected along with professional services.And it has been replied by the department that scope of clarification issued for section 194-I(RENT) can not be extended for section 194-J(Prof. services).The reply of the department is embedded hereunder.

In above reply department reasoning is not very impressive,they said that in section 194-I words has been used "income comprising in rent "where as in section words used in section 194J is "any payment " so the scope of clarification circular can not be extended to section 194-J ,but they have missed the words after the word "any payment" u/s 194-J ,in section 194-J wording is given hereunder

194J. (1) Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any sum by way of
  • (a) fees for professional services, or
  • (b) fees for technical services, 18[or]
  • (c) royalty, or
  • (d) any sum referred to in clause (va) of section 28,]
"so in above section any some by way of fees for professional services " has been used so it should not be interpreted as any sum paid ,service tax is charge on fess for profession service and not a fess as such so it in my opinion it should also not covered u/s 194 -J for tds .

but department has clarified it otherwise ,and in my opinion it should be challenged


Download above letter in word format
Rajasthan High Court decided that TDS on Service Tax U/s 194J Not applicable (8/2013)
Update : Department has issued a clarification vide circular no 01/2014 dated 13.01.14 that in view of Rajasthan High court judgement TDS under section 194J shall not be applicable on service tax portion if that is indicated separately as per term and condition of agreement between payer and payee.(read Circular 01/2014 dated 13.01.2014 )

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  1. The said circular dt 30.06.08 is not clear, the CBDT whenever they give any clarification they keep some scope of confusion..... cont they issue clarification with clear wordings.... in this circular if they clarify like 'yes,TDS need to be deducted on the gross amount of the proffessional bill including Service Tax' or 'TDS is to be deducted on the bill amount excluding Service Tax' it would be better. i feel the CBDT should word their clarification to give clarity on the issue.

    ReplyDelete
  2. i have got one book of 64 pages published by someone. is this professional service? person has not added service tax. so, how to calculate tds?

    ReplyDelete
  3. my office is a small one. sometimes in a yr 0r two we deduct tds on any bill. that tds amount is very small like 300-400 rupees. can we file the tds return by ourself without the help of CA.

    ReplyDelete
  4. whether tds is to deducted on cost of medicine also given by hospital as part of treatment under section 194j. if yes, pl clarify why as medicine is not any professional service. Further whether it is necessary to produce separate bill by hospital for medicine and treatment to avoid tds on medicine portion. what is the difference if bill is given inclusive of medicine or separate bill.

    ReplyDelete
    Replies
    1. In our view ,tds is not required to be deducted only if separate bill of medicine has been provided ,otherwise it will be treated as bundled services and tds will be required to b deducted on full amount.

      Delete
  5. Sir,

    I want to know that when company is paying consultancy charges of rs.15000 monthly to the consultants and has not deducted TDS even when it crossed the exemption limit of Rs. 30000 in third month . So what will be the liability of the company if the TDS will be deducted in fourth month..? Whether company is liable to pay any penalty and how much..?

    Thanks

    ReplyDelete
    Replies
    1. please provide date of payment ,amount paid ,amount deducted month wise and date of deposited

      Delete
  6. Amount is not yet remitted to the person..
    30/04/2013-15000
    31/05/2013- 15000
    30/06/2013- 15000
    31/07/2013-15000

    TDS deducted on 31/07/2013 as 6000 and deposited on 06/08/2013.

    ReplyDelete
    Replies
    1. You have to pay interest as under
      30/04/13 to 06/08/13=4 month @1.5% pm on 1500=Rs 90
      30/05/13 to 06/08/13=3 month @1.5% pm on 1500=Rs 60
      30/06/13 to 06/08/13=2 month @1.5% pm on 1500=Rs 30
      Total Interest =90+60+30=150

      As per section 194J tds is deductible even if payment is likely to be more than 30000 ,so we have to estimate the amount ans should deduct tds from first payment itself.

      Delete
  7. I am work in waste water treatment company in accounts dept so,i want to ask when i will be deducted tds on professional fees,rent,royalty then it is necessary to pay service tax

    ReplyDelete
    Replies
    1. In above services ,service tax is sole responsibility of service provider. However you should pay service tax to service provider if they have charged extra and contract between you and them provide for extra payment

      Delete
  8. Received an invoice for background check services from the vendor. Will this get taxed under 194C or 194J?

    ReplyDelete
    Replies
    1. Please provide more details about ,services received by you

      Delete
  9. Dear sir,
    I am working as technical person in Deptt. of Forest, Govt. of WB. My monthly fees is Rs. 11,000.00 pm. After deducting TDS u/s 194J I am getting Rs. 9,900.00 pm. Now I want to know when and I can claim the deducted amount. I also want to know how can I know deducted amount is properly deposited in my PAN or not.
    thanks

    ReplyDelete