Tds on service tax payments to non-residents

N SURYANARAYANA (Querist) 24 February 2015 This query is : Resolved
If a non-resident company provides services in India for a resident company and such services are liable for deduction of tax at source u/s 195 of I.T.Act, 1961 and service-tax authorities collected “service-tax” from the resident company on the basis of “reverse charge mechanism”, is the resident company liable to affect TDS under I.T.Act, 1961 on such “service-tax” component while making payment to non-resident service provider? Please offer your valuable opinion supported by any relevant case laws.

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Anirudh (Expert) 24 February 2015
The answer to your query is YES. Further you are required to deduct the entire Income Tax as TDS. The tax to be deducted is 40% (which is the applicable tax rate) on the remittance made to the non-resident company.

Guest (Expert) 24 February 2015
Consult the CA Club of this Forum whose details are just below in this same thread for a Precise and Perfect reply from Practising CAs with out any Presumptions.

R.K Nanda (Expert) 24 February 2015
consult tax lawyer.

Rajendra K Goyal (Expert) 25 February 2015
Consult local tax consultant.

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