my company's holding company is in US( incorporated outside India). Ours is a tech company, and we provide E platform for publishers who want to publish their work in e format. foreign holding company hires people outside India to provide services w.r.t marketing and advertisement by organizing e podiums, e book fairs etc. Service provider is an outside entity who bills our Holding company. Whatever revenue our holding company generates they send us back 80% of that, Similarly as per the Our US company also charges home company for the 80% of the expenditure incurred. ST auditor is of the opinion that we must pay service tax on 80% of the marketing and advertisement expenses our contention is that since there is no profit element involved when we are paying to our holding co. It is basically in the nature of reimbursement only Kindly advice.
CAclubindia
