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

On Wednesday, August 6, 2008 | 6:57 AM

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


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3 comments:

  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.

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  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?

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  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.

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