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Transaction between holding and subsidiary comapny

This query is : Resolved 
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(Querist)
08 October 2009 Dear sir,

1.A Indian Company(Holding Company) having foreign subsidiaries charges intercorporate charges on the foreign subsidiaries. will this attract service tax?

2.The Holding Company incurs cost on behalf of subsidiaries both direct and indirect cost. The direct cost is charged to subsidiaries with a margin. Indirect costs are charged at the standard rates arrived by standard costing.

In the above situtaion will there be any service tax? if yes, under which head and why?

It will be of great help if somebody could get back to me on this at the earliest.

Regards,
Jumbo
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Rajesh Kumar

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Rajesh Kumar (Expert)
10 October 2009 There is no service tax on reimbursement. No ST is required to be paid on intercorporate charges.
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