Service tax payment query

Santosh Gill (Consultant) (37 Points)

13 April 2012  

Requesting help for the below query :

`A' an Indian IT Company receives legal services from `B' Firm in India. `B' raises Invoice to `C' in USA (holding Co. of `A') for such services amounting to Rs 2 lacs including service tax. For such exps., `C' debited `A' through its inter company transaction.  `A' booked  2 lacs +additional service tax 20600 (considering 10.3%), totalling to Rs 220600.

The question is : Does `A' required to pay the service tax on book entry or to pay after it makes payment to its holding company `C' ?