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Service tax applicability on translation service

Pratikkumar Lodaya (Assistant Manager)     16 June 2012

Pratikkumar Lodaya
Assistant Manager 
 40 points

| My Other Post


Querist represents a translation agency in India. Querist have questions regarding service tax and TDS.

Here is the situation –

1.       Querist have a client outside India who sends me a translation work to be translated from Language A to Language B


2.       Querist hire a freelancer from outside India to perform this task


3.       The client pays in USD to my Indian Bank Account


4.       The Querist pays freelancer in USD from its Indian Bank Account

Questions -

a.       Are my services liable under service tax rules in India or are exempt.

b.       How much TDS should be deducted under following two cases –

i.            Should TDS be deducted on the payment that is being routed outside India to freelance translators residing outside India?

ii.           In my case, 90% payments are being made to independent individuals and only 10% of payments to companies.

Ashish Gupta (Proprietor)     17 June 2012

Ashish Gupta
 3 likes  245 points

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Services provided to US client

Till 30-06-12, the translation services are not taxable. But w.e.f. 01-07-2012 your service would be taxable however the services rendered by you will be treated as Export of Service and hence no service tax is payable.

Services procured from US

w.e.f. 01-07-12 the translation services provided by a person located in US to a person in India then it will be treated as Import of service and you have to pay service tax on the value of the same as service recipient. 

TDS on payments

TDS will be govern by treaty and to my knowledge, such payment will be treated as Business income and shall not be taxable in india. Thus no need to deduct TDS.

Sunil Kulkarni (CEO)     24 February 2020

Sunil Kulkarni
 22 points

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For the above payment to the overseas translator (import of service), since the translator is not paying the tax in India, are we supposed to pay on behalf of him (RCM) ? 

Pls advise.



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