TDS clarification for fees+Service tax?

Question

Dear Sir,

I am A Professional Engineering Consultant. When I raise bill to my client, over my total fees I add Service tax at 12.36% in the bill. Clinet pays the bill but he deducts TDS on total amount of my fees including Service tax. When I argued with them that the Service Tax is not my income and therefore you should not deduct TDS on that. He says because it is reimbursement to you so we will deduct TDS on this too. Is it all right, if not, can you give me some conclusive reference/guidelines so that I can argue convincingly/conclusively for not deducting TDS on the service tax.

Thanks and Regards,

M.L. BAPNA

UDAIPUR

PH. 09413318635

Answer 1

TDS need to be deducted on the total bill amount. Only TDS on rentals is an exception to this rule .