We are liableto pay service tax on withholding taxbearingus

 

Dear All

We have received service from our foreign consultant.The foreign consultant base is not in India i.e.non P.E.status therefore We are liable to pay service tax. We are also bear withholding tax (TDS) for foreign payment.My query is that what is taxable value in this case i.e. whether service tax paid only foreign remittance amount or service tax paid on foreign remitted amount plus TDS which is bearing by us.If our agreement with the foreign consulant that we bear all taxes applicable in India.

Replies (1)
Originally posted by :Ajay
"  

Dear All

We have received service from our foreign consultant.The foreign consultant base is not in India i.e.non P.E.status therefore We are liable to pay service tax. We are also bear withholding tax (TDS) for foreign payment.My query is that what is taxable value in this case i.e. whether service tax paid only foreign remittance amount or service tax paid on foreign remitted amount plus TDS which is bearing by us.If our agreement with the foreign consulant that we bear all taxes applicable in India.
"

 

Ajay,

Service tax is to be paid on gross amount charged. Therefore taxable value will be

= (amt remited) + (TDS)

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