Service rendered by a foriegn client

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Srinath Shenoy (Querist)

17 January 2011 Dear friends,

My company is an Indian company engaged in selling construction chemicals in large scale to the projects all over India. we are charged by a foreign company a fixed amount of techical know-how/ professional fee for the services charged by them on a monthly basis and we get invoice for the that. The foreign company do not have any office here in India. My queries are:

1.The foreign company (service provider) don't charge service tax in their invoices. Is it our liability (the company receiving service)to register under service tax and pay the service tax? Or is that the responsibility of the foreign company to register under service tax act and charge service tax on their invoices?

2.I understand that we need to deduct the TDS from their invoice and pay it to the government. Since the foreign service provider don't have a PAN number, how could we deposit the TDS without mentioning their PAN number? Is it mandatory for the foreign company to register for PAN in India?.

Is yes, is it the same procedure as same as PAN registration for Indian companies?

Experts kindly reply ASAP and oblige..

CA.Hanumantha Reddy

CA.Hanumantha Reddy (Expert)

18 January 2011 for the first question, yes, you have to pay the service tax on such import of services.
For Second query, the foreign companies are exemped from registering PAN (i'm not sure about it. pls recheck it up once again)

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Srinath Shenoy

Srinath Shenoy (Querist)

18 January 2011 Thank you Mr.Hanumantha Reddy. What is TDS rate to be deducted? is it 40+2.5 surcharge + 3% cess? or just 10% as in case of Indian assessee?

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