Invoiced to overseas company, paid by office in india

Hi,

We provide services to a US company which has offices all over world including one at Mumbai. We invoice them through their online portal and the invoices are generated in the name of office which received the services (for example, Germany, US, Mumbai, etc.). However, the service tax is included only for those invoices which are generated for Mumbai office. All invoices are raised in INR only.

So far it is ok, as Service tax is applicable only for Indian customers. But, the matter gets complicated because all the payments are made by their Mumbai office only. They deduct TDS on all payments.

My questions are:

(1) Is this OK that I do not charge Service tax in my invoice to their overseas offices while they pay through their local office?

(2) Should they deduct TDS at the time of payment for such invoices which were raised for their overseas offices?

My CA is of the opinion that this is not correct. If they deduct TDS then they are liable to pay Service Tax also.

What is the opinion of community here?

Thanks.

Ajay