TaxTMI 
TaxTMI 
An Indian Company is taking services of a US Company for digitisation of Data ( digitisation means converting hard copies into soft copies in a proper format). a.Is these services are taxable under service tax ?If yes, under which service. b.Is service tax is payble on import of these services. c.Is TDS under Income Tax is deductible on these services. If yes, under which clause of DTAA.
Taxability of service tax
05 Sep 2008 
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Business support service classification may attract service tax under reverse charge and raise withholding tax issues under TDS rules
Overseas data digitisation services are likely classifiable as Business Support Service and, if used in India, may be taxable under the reverse charge mechanism; importability and chargeability are governed by the Import of Services Rules and require factual analysis. A domestic payer may need to deduct tax at source under domestic law, subject to the India-USA DTAA and the "make available" test which can affect whether the service is taxable in India. (AI Summary)
Overseas data digitisation services are likely classifiable as Business Support Service and, if used in India, may be taxable under the reverse charge mechanism; importability and chargeability are governed by the Import of Services Rules and require factual analysis. A domestic payer may need to deduct tax at source under domestic law, subject to the India-USA DTAA and the "make available" test which can affect whether the service is taxable in India. (AI Summary)