TDS & Service Tax

[Abdul Razack Basha]

Dear Sirs,

We are sending following payment to USA through Telex Transfer against Invoice raised by the US company.

1. 2 percent commission on Invoice Value to USA Agent for getting order and payment from US Companies. - Regular

2.Warehouse rent also sending to USA warehouse company to store the goods till the confirmation of delivery from USA company- Occasionally

3. Quality Inspection charges also sending to US company for checking of our goods before sending to our customer (US company) - Occasionally

So please clarify TDS and Service Tax applicable for the above payments with notification and It is very important to us.

Regards

Abdul Razack B

[DR.MARIAPPAN GOVINDARAJAN]

Whether you have got clarified in the above issue? If not please inform.

AI Summary

Withholding tax on cross-border service payments: commission, warehouse rent, and inspection fees may trigger TDS and service-tax obligations.
Whether withholding tax and service tax apply to three categories of telex-transferred payments to US recipients: a recurring 2% commission to a US agent for obtaining orders and payments; occasional warehouse rent to a US warehouse for storage pending delivery confirmation; and occasional quality inspection charges to a US company for pre-shipment inspection, with frequency and the nature of services determinative for withholding and indirect tax treatment.