Service tax and income tax

TDS / TCS 506 views 1 replies

I have a peculiar situation.

I started a company to provide implementation services for an ERP application.

However, I got the following order which I am eager to deliver, because it will open up opportunity in India later.

My client is based overseas and needed a specific resource on 4 months retainership and will be paying me in USD.

Since I did not have that specific resource, I sub-contracted the assignment to another company based overseas to assign one of their resource and get the work done.

PLEASE NOTE : The receiver and delivery of the service is being done outside INDIA, but under the name of my company (i.e the Receiver has contracted the assignment with me and I in turn have raised the purchase order at a nominal lower price to delivery provider)

My queries are : a)  Will I be liable for Service Tax ?

                              b) Will I need to deduct any TDS when I pay to the sub-contractor. The sub-contractor does not have a company in India and does not have any business that compels them to seek PAN number or establish a company here.

Thanks in Advance..

Regards,

Krish

Replies (1)

situation 1)

whole sum is paid to you, and you paid to sub contractor, 

you have to deduct TDS from sub contractor

you have to pay service tax for import of services, and claim back refund against export of services, 

 

situation 2)

your buyer has paid amount fixed by you to sub contractor and balance to you 

 

here you dont have to deduct TDS , no service tax either.


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