16 November 2010
A foreign Company is Providing Know How services to an Indian Company for a Turn key Project and Charging amount both in Foreign Currency and INR (RS). For Payment in Foreign currency, Liability for Deposit of Service tax is of Indian Company as per Service Tax Act.Hence Service Tax is required to be deposited by Indian Company . As per Terms of the contract Service tax has to deducted by Indian company from the payments due to Foreign company for Services in INR (RS). It may please be suggested that whether withholding tax is also to be deposited on amount of Service Tax which has been paid by Indian Company and Subsequently recovered from the Foreign Company
17 November 2010
withholding tax need not to be deposited on the amount of service tax as the withholding Tax is to be deducted on the amount paid to foreign company.
Service tax paid on the import of services is not the payment made to non resident.
further service tax payment is also not the income of foreign company so question of withholding tax doesnot arise.
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