DEPOSIT OF SERVICE TAX

[S.C. WADHWA]

ABC Pvt. Ltd. a company registered in India want to pay ₹ 600000/- to a company in Mauritus for professional services rendered by it towards formation of a new company, appointment of directors, company secretary.

Query is:

Whether ABC is required to deposit service tax on recipient basis. If yes, at what rate.

AI Summary

Service tax on imported services: recipient liable to pay tax on gross payable to foreign professional provider, with credit available.
The Indian recipient must pay service tax on professional services procured from a foreign provider calculated on the gross value payable, with no abatement or exemption; payment is to be made by electronic cash (GAR 7 challan) and the recipient may thereafter claim CENVAT credit under the CENVAT Credit Rules, 2004 upon meeting prescribed conditions.