In case where service tax is required to be deposited under reverse charge mechanism like under import of service from outside India, whether service tax is to be computed by considering the amount paid to foreign service provider as incusive of service tax and calculate service tax by grossing up the amount paid to service provider???
Relevant provision: Sec 67 provides for valuation of taxable service and prescribes that service tax is to be calculated on gross amount charged. It further states that where the gross amount charged is inclusive of service tax, service tax is to be calculated by grossing up.
So, for ex. if amount paid to foreign service provider = USD 100
then, service tax (to be paid under reverse charge) = 100/112.36*12.36????
Please clarify!!
CAclubindia
