Service Tax on Import of services
This query is : Resolved
CA Gaurav Rastogi
(Querist)
28 January 2010
Dear Sir,
We have received a bill for services provided in India from a foreign company for USD 1260. Now we have to bear the tax liability on that. and we grossed up the TDS liability as 1260*10/(100-10)= 140 USD.
Now this being import of services we have to pay service tax as a service receiver. Now the question as to how the service tax liability would be calculated. on 1260 or on (1260+140=1400. or any other method.
Kidnly elaborate the answer.
We have received a bill for services provided in India from a foreign company for USD 1260. Now we have to bear the tax liability on that. and we grossed up the TDS liability as 1260*10/(100-10)= 140 USD.
Now this being import of services we have to pay service tax as a service receiver. Now the question as to how the service tax liability would be calculated. on 1260 or on (1260+140=1400. or any other method.
Kidnly elaborate the answer.
Madhukar N Hiregange
(Expert)
29 January 2010
As I understand the TDS is on their account and therefore tantamounts to payment to them Therefore ST to be paid on 1400$.
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