On June 13, 2012 the case of M/s TVS Motor Company Ltd. Vs. CCE, Chennai-III is decided vide Final Order no. 652 of 2012, wherein it has been held that service tax is also leviable and payable on income tax at deducted at source as the same is a part of consideration. The term ‘consideration’ for the valuation of taxable service is defined by explanation appearing under Section 67 which says that consideration includes any amount that is payable for the taxable service provided or to be provided.

Further Rule 7(1) of the Service tax (Determination of Value) Rules, 2006 has also made a provision in respect of services covered by Section 66A of the Act.

According to this Rule, measure of value for taxation of service covered by that Section shall be such amount as is equal to the actual consideration charged for the services provided or to be provided.

Hence service tax is also payable on TDS as the same is covered under the meaning of consideration.

The copy of the case law is annexed herewith your kind reference….