TDS ON PAYMENTS TO NON-RESIDENTS

[S.C. WADHWA]

A Pvt. Ltd. Co. in India has to make payment to Foreign Co.

 Such Foreign co. are consultants to breakfast cereal Ind.

They are providing us consulting services.

Payment is to be made in GB Pounds.

Whether such payment is subject to tds and If yes, at what rate and what provisions to be complied with.

One bill is furnished inclusive of amount charged towards services rendered and reimbursement of expenses.

[rishi mohan]

In the above case both tds and service tax shall be applicable. Tds shall be deducted at the particular rate and service tax shall be paid on reverse charge basis.

[Atul Khandelwal]

OK the above bill is chargable to TDS. Further can any one clarify, if we have two seperate bills for professional fees & reim of Exp what will be the tax status

AI Summary

TDS on cross-border consultancy payments applies; service tax on imported services may be payable on reverse charge basis. Payments by an Indian company to a foreign consultant for advisory services attract TDS on the fee component, requiring statutory deduction, deposit and reporting; bona fide reimbursements may be treated differently if supported by evidence. Import of such consultancy services also triggers service tax on a reverse charge basis, obliging the Indian recipient to discharge the tax where applicable. The payer should segregate fees and reimbursements and follow withholding and reverse charge compliance procedures.