Foreign payment to service provider

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

09 December 2015 Sir we are working in Multinational Brand in Hospitality Industry.
Hotel is making payment to various parties outside India for various services provided like technical assistance, Marketing charges, Commission processing etc.
We are advised to Pay deferred Service Tax on Invoice amount @14.5% ans later on take Input credit for the same.
Please let me know whether this treatment is correct or not. and if yes then which section should i refer???

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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09 December 2015 No service tax payable on agency service provided outside India. Yes input credit on service tax paid on those service utilized for providing out put service can be claimed while paying out put service tax.

Querist : Anonymous

Querist : Anonymous (Querist)

09 December 2015 we are service receiver. And no service tax is shown on invoice given by foreign party. We are advised to pay it on basis of Reverse Charge Mechanism.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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09 December 2015 Under reverse charge mechanism you are liable to pay service tax to Govt when service provider is foreigner. Foreign party will not claim any service tax in the invoice.

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