I am from Mercedes-Benz R & D. In our present SAP configuration Tax deduced at source (TDS) is calculating on the base value including service tax in case the service tax is considered as ineligible for taking credit.
As per Income tax rules the TDS is calculated on base value excluding service tax. Hence now a days vendors are asking us why you are deducting TDS on service tax element.
Kindly let me know how to rectify this wrong computation of TDS?
Thanks in advance.