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%
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%
21 December 2009
100 /110.30 X 10.30 = the service tax amount.
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
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.
Yes, Service Receipeint can take the cenvat credit of Service Tax paid under reverse charge method.
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