royalty payment

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kaushal (Querist)
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16 July 2009 we are payor for services received from USA company and we are paying royalty so at time of paying royalty do we need to reduce service tax from royalty ???(I donot mean TDS)
so is ther any DTAA agreement with USA for dedudtion of service tax on royalty paid??
please give me link of DTAA ..........

Jitender

Jitender (Expert)
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16 July 2009 DTAA does not specify the service tax payments.
u need to gross up the amount & pay service tax, if agreement allows, then it can be deducted from payment.

kaushal

kaushal (Querist)
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17 July 2009 please provide link as i need evidence

Rajesh Kumar

Rajesh Kumar (Expert)
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19 July 2009 DTAA has nothing to do with service tax- it is for income tax. The agreemnet is there on income tax department web site.
Regarding the service tax liability, you are required to pay ST under Section 66A of the Act under reverse charge method. However, if it is your input service, you are eligible for credit of this tax.

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