Reimbursement of expenses..

[Reshma kochar]

Dear Experts,

Our Co. is one of the subsidiary of a foreign Co...Which pays comman insurances, internet usages say leased lines or licence procurements for its all subsidiaries.. My question is - Will  withholding or service tax liability comes on us or not? 

AI Summary

Withholding tax may apply where a foreign parent earns income from services, while service tax typically not on mere reimbursements.
If the foreign parent earns income from services to Indian subsidiaries, withholding tax/TDS obligations can arise on payments chargeable to tax in India. By contrast, payments characterised as mere reimbursements where the parent does not render services are generally not subject to service tax and are not treated as import of services. A careful fact-specific analysis is required to determine characterisation and tax consequences.