Calculation Mechacanism of ST on Import Service

[Asked by Guest]

Dear Freinds

Can you guide me the calculation mechanism of Service tax & Tds deduction om import service with a exemple.

Best Regards

Partha

[Ganeshan Kalyani]

The consideration paid to the service provider converted in Indian currency should be the basis for service tax.

Dear Mr Kalyani

Thanks for your reply.I want to say that the withhold tax to be deducted on service tax (RCM).

Regards

Partha

[Ganeshan Kalyani]

Service tax is payable from own pocket and it can not be reduced from the consideration payable to the service provider. Tds is not deducible on service tax portion.

[Ganeshan Kalyani]

For TDS deduction you should refer DTAA.

AI Summary

Service tax on imported services is calculated on consideration in Indian currency; TDS cannot be deducted on the tax.
Service tax on imported services is calculated on the consideration paid to the service provider after converting that consideration into Indian currency. Service tax must be paid from the recipient's own funds and cannot be reduced from the consideration payable to the service provider; TDS is not deductible on the service tax portion. For TDS treatment of payments to non-residents, reference should be made to the applicable Double Taxation Avoidance Agreement.