We had conducted a training program in India for which the trainer was invited from USA and the company (Name XX) to which he belonged was paid in Dollars.
We collected Service Tax from the particpants of the training program.
The question is who fulfills the service tax liability of Company XX in India for the fee which was paid to them.
One opinion being given is that since Company XX does not have a presence in India, the responsibility for paying service tax on their behalf is ours. After we have paid the service tax on their behalf, we can claim a set off aginst the service tax we have collected and then pay the net tax.
The second opinion being given is that whatever service tax we have collected from the training participants - we pay that complete amount to the government. In this option we neither pay any service tax on behalf of the foreign company and therefore neither claim any set-off.
Which is the correct rule position ?
CAclubindia
