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Service tax and tds on royalty payment to foreign vendor

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(Querist)
21 September 2012 Hi,

Please can anybody help me to solve my query regarding Service Tax and TDS calculation on royalty Payment to Foreign Vendor.

We are paying Royalty to foreign Vendor and we have to calculate TDS & Service Tax on this Royalty. Foreign Company is not going to bear either Service Tax or TDs. So if i am paying 1000 rs. Royalty to Foreign Company what will be the service Tax & TDs liability for us and what will be the accounting entry.

thanks in advance for your help.

Regards,
Ratna
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CA Navin Jain

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CA Navin Jain (Expert)
21 September 2012 TDS AMOUNT (1000/90)* TDA RATR

SERVICE TAX IS RS. 1000*12.36%
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ratna

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ratna (Querist)
21 September 2012 Hi, Thanks for your reply.
Dont we have to pay Service tax on TDS grossed up Value. Please explain me.
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CA Navin Jain

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CA Navin Jain (Expert)
21 September 2012 beacuse in the form 15CB ca certify onle foreign remitance amount which not including service tax.
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CA Navin Jain

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CA Navin Jain (Expert)
22 September 2012 Hi RATNA,

YES SERVICE TAX ALSO CALCULATED 1000/90*100)*12.36%

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