Taxability under income tax and service tax
This query is : Resolved
Thomas Thomas
(Querist)
21 March 2012
A foreign entity is planning to outsource the production/fabrication of a part of a heavy equipment to an Indian entity.The foreign entity does not have a permanent establishment in India.
Kindly enlighten the impact of TDS and Service Tax on the above transaction.
Kindly enlighten the impact of TDS and Service Tax on the above transaction.
Krishna Mohan
(Expert)
21 March 2012
When the foreign is not having a PE in India, it need not deduct any TDS on payments to the Indian entity. W.r.t. ST, please mention whether the equipment will be used in India or outside India. If it is for the purpose to use outside India, it tantamount to export of services by the Indian entity and hence no ST is payable. However, if the equipment is intended to use in India, the Indian entity has to collect ST from the foreign entity.
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