Implication of TDS

[Guest]

As a service receiver ( for import of services in India) we have to pay service tax on $ 100 to be paid to a management consultant in UK. Whether TDS ( under Income Tax)is to be deducted on $100 or at $112.36 ??

AI Summary

TDS should apply only to $100, not $112.36, when paying UK consultant for services imported to India. A query was raised about whether Tax Deducted at Source (TDS) should be applied to $100 or $112.36 when paying a UK management consultant for services imported to India. The consensus among respondents was that, according to relevant tax provisions, TDS should be deducted only on the $100 payment and not on the additional service tax component. This is because the liability to pay service tax falls on the service receiver in India, and thus, the TDS is applicable solely on the principal amount paid to the non-resident entity.