TDS on legal services ?

CMA. Subhash Kumar Jha (General Manager - Finance)   (8391 Points)

25 January 2011  

'X' (a pvt ltd co.) is fighting a case against a multi locational company.

'X' has appointed 'A' (a legal firm) for this case. 

In this connection, a case has to be filed in Malayasia against a Malaysian company. 

'A' is providing legal consultancy to 'X' in India. Further, in the above Malaysian complaint, "B" has provided legal consultancy for which "A" has paid "B" total charges (including consultancy, stationery, communication etc).

Now, 'A' has raised a debit note on 'X' for the above payments made to 'B'.

What is the TDS liability of 'X' in settling the debit note of "A" ?