TaxTMI 
TaxTMI 
Implication of TDS
18 Jun 2007 
3 Replies 
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TDS on cross-border service payments applies to the service consideration only, excluding service tax payable by the recipient.
Where the recipient in India is liable to discharge service tax on imported services, the service tax element is the recipient's tax obligation and not payment to the foreign service provider; therefore withholding under the non resident payment rules is to be calculated on the service consideration alone and excludes the service tax charged to and payable by the Indian recipient. (AI Summary)
Where the recipient in India is liable to discharge service tax on imported services, the service tax element is the recipient's tax obligation and not payment to the foreign service provider; therefore withholding under the non resident payment rules is to be calculated on the service consideration alone and excludes the service tax charged to and payable by the Indian recipient. (AI Summary)
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 ??