Income Tax and Service Tax provisions

An Indian Company wishes to raise loan in Abu Dabhi with the help of a professional. In this regard the Indian Company will be paying the professional charges to the professional. What are the Income Tax and Service Tax provisions in this regard?  

Income Tax - The DTAA provisions will have to be considered, if any. TDS should be deducted as per the DTAA or as per sec 194. whichever is benefitial to the assessee.

For Service Tax - The company will have to gross up the fees and remit the service tac on it to the dept

For Income Tax: Deduct tax as per section 195 as withholding tax

For Service Tax: This is Import of Service, hence, you will have to pay Service Tax @ 10.3% (now 12.36%)

Regards

Prateek

Trust the professional in question is in Abu Dabhi... Then the replies above will be correct.