Reverse charge

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

12 January 2012 If we have to make a payment to foreign party for receiving professional services, then the reverse charge applies, it means we have to pay service tax to govt.,
Eg:
payment due:100
service charge:10.3
TDS: 20%(110.3)=22.06
Net Amount to be paid to the party is Rs. 77.94 or Rs. 88.24 ?

PUNEET GOYAL

PUNEET GOYAL (Expert)
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13 January 2012 In above case your liability is to pay Rs. 110.30 which is to be paid as under:

1. Rs. 10.30 to be deposited to service tax department.
2. Rs. 22.06 to be deposited to Income tax department.
3. Balance i.e., rs.77.94 (110.30-10.30-22.06) to be paid to foreign party.

Querist : Anonymous

Querist : Anonymous (Querist)

13 January 2012 Thanks for the reply.

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