Is TDS applicable????

Hi all,

My query is .....

my client's business is Server hosting & domain Registrations. They receive & make payments through an US based gateway, functioning in US. The gateway in turn remits the net collections after withholding certain percentage for the service rendered by them.

My doubt is:

1. Under what head should this service/expense be treated as, rendered by the US co.,

2. Is TDS applicable for the same. If YES, under which head???

Thanking You....