Calculation of service under Reverse Charge method

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

20 December 2009 As serive tax is payable by service receipeint in case of foreign payment under reverse charge method.

My question is whether the TDS amount which is deducted from foreign payement is included in the calculation of service tax becase TDS is also borne by service receipeint and paid to govenment exchequer.

Example:

Sevice charge by the foreign service provider = Rs 100

TDS is deducted (paid by receipeint) = Rs 10

Under which below mention option service Tax will be calculated or Is there any clarification or notification from depatment

Option 1. Rs 100 X 10.3% or

Option 2. (Rs 100+Rs 10)= 110 X 10.3%

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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21 December 2009 100 /110.30 X 10.30 = the service tax amount.

CA Sanjeev Kr Jain

CA Sanjeev Kr Jain (Expert)
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21 December 2009 the service receipeint has to pay service tax on foreign payment under reverse charge method pl guide if the same service receipeint can take cenvat credit of this payment as input credit to reduce his tax liability as service provider

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Querist : Anonymous

Querist : Anonymous (Querist)

21 December 2009 Dear CA. Sanjeev

Yes, Service Receipeint can take the cenvat credit of Service Tax paid under reverse charge method.