What is the Value for ST?
sri
(Querist) 16 May 2011
This query is : Resolved
Dear Experts,
Please clarify the doubt.
I am having a doubt regarding the following queries; when, if, a person is required to pay service tax as a recipient of service for the service imported from the country other than India what would be value of service; for the payment of service tax need to pay. The queries are
1. If, the agreement to pay in Indian Currency, invoice value is Rs.10,000
(a)If TDS deducted from the Rs. 10,000, (Rs.10,000 less TDS on Rs.10,000), Service Tax on value?
(b)If TDS is not deducted from the Rs. 10,000 (pays Rs.10,000 to foreign vendor) and TDS pays from India Company, as per agreement. What is the impact on Service Tax and Income Tax? Service Tax on value?
2. If, the agreement to pay in Foreign Currency, invoice value is $10,000
(a)If TDS is deducted from the $10,000, ($10,000 less TDS on $10,000), Service Tax on value?
(b)If TDS is not deducted from the $10,000 (pays $10,000 to foreign vendor) and TDS pays from India Company, as per agreement. What is the impact on Service Tax and Income Tax? Service Tax on value?
Based on the above queries, I would like to know the following:
3. What is the impact on Service Tax (regarding the valuation of taxable service and others like gross amount?) and Income Tax (admissible or non-admissible expense and others, if any – amount), in both cases?
4. What are the requirements to be fulfilled regarding the same in both the cases, under different statutes?
Thanking you,
Yours faithfully,
Srikanth
Learner
S R agrawal
(Expert) 17 May 2011
In cases of taxable service received from outside India, Import of Service Rules are applicable and the Service Receipient is liable to pay the Service ax.
As regards the Value of taxable Service, the total amount paid to the service provider in condsideration of Service is liable to be taken into account. The TDS ifany is not to be deducted from the gross value.
sri
(Querist) 25 May 2011
Dear Sir,
Many Thanks for clarifying the doubt.
for clarification - the gross amount is bill amount plus TDS paid by Indian Company.
then, What would be the impact on the Income Tax in the above 2(b), as per Income Tax the
TDS has to be deducted from the value of the bill, in this case not deducted, instead paid extra from Indian company.Whether is this expenditure allowed/disallowed?
