Reverse charge mechenism

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Neha Kothari (Querist)
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04 October 2016 Dear Expert,

Please advise, if service provider is a foreign company, service recipient is an Indian company and place of service is Outside India.
Please advise whether ST is chargeable under reverse charge mechanism for Indian company?

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CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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04 October 2016 Tell me the nature of service. No reverse charge applicable in case of exibition services, hotel and intermediary services provided out side India to an Indian company.

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Neha Kothari

Neha Kothari (Querist)
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04 October 2016 Sir,

We have bought 2nd hand machinery from Switzerland. The services are related to dismantling the machinery there. We have given contract to a Netherlands company

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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04 October 2016 This service is rendered outside the taxable territory so no reverse charge applicable.

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Neha Kothari

Neha Kothari (Querist)
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04 October 2016 Thank You so much Sir. Could you also advise on TDS portion. Do we need to deduct TDS while paying to Netherlands company?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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04 October 2016 No need of TDS as service is rendered by non resident outside India.

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Saket Agarwal

Saket Agarwal (Expert)
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05 October 2016 Looks like the place of provision of service is outside India. Since service tax is a destination based tax, there will be no levy of service tax on services provided outside the taxable territory.

Neha Kothari

Neha Kothari (Querist)
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05 October 2016 Dear Sir,

Just for my own knowledge, if the contract with Netherlands company include services of:
1. dismentling the machinery in Switzerland and
2. reassembling the machinery in India in the original form as was in Switzerland,

then would ST and tds be applicable?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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05 October 2016 TDS and ST will be applicable on reassembling the machinery in India.

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