TDS on Payment to Foreign Company

This query is : Resolved

Mukund Patel (Querist)
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19 January 2010 Dear All,

I want to know about calculation of TDS and Service Tax on payment made to foreign company by domestic company.

The case is as follows:
Payment made by domestic company to foreign company of 10000/- USD for the purpose of professional or technical services.

Please help me out how to calculate TDS and Service Tax from the above mentioned details and also let me know which section is applicable for the same.

Thanking you,

MUKUND

CA Prashant Gupta

CA Prashant Gupta (Expert)
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20 January 2010 TDS arises only if the payment is chargeable to tax in India. So if work is done outside India and payment made to person directly outside India is not taxable and no TDS (Circular 786, dt 7 Feb 2000). In this case a certificate from CA in from 15CB and an online form 15CA will be filled.
But if payment is made in India or work has been done in India then it is taxable in India and TDS liability will arise. TDS on Technical services for F.Y. 2009-10 is 10.3 (10%+2%+1%) as payment is below 1 Crore no surcharge is applicable
for service tax you have to explain type of services more. Because only by professional or technical services can't define exact sub-clause of clause 105 of section 65.

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Mukund Patel

Mukund Patel (Querist)
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20 January 2010 Thank you

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