03 December 2010
I require your opinion of below mention query
Say we Imported Service ( BUSINESS SUPPORT SERVICE) from A Ltd on 1.4.2010 amount to USD 1000 same is accounted in our books by debited to Expenses Rs. 45,000/- (since exchange rate is Rs. 45/- per USD. This expenses also liable to With holding tax say at 10% same is debited to A Ltd on 1.4.2010 On 1.6.2010 we made the payment to A Ltd that time exchange rate is Rs. 49/- per USD so we remitted to them 900 UDS (Rs. 44100/-)
My Question is that 1. Is we require to pay service tax on accrued amount (in our Eg. Rs. 45000/-) or on actual paid amount (Rs. 44100/- Actual paid + Rs. 4500/- Withholding tax paid)? 2. Is we require to pay proportionate Service tax on payment of withholding tax? (in our Eg on Rs. 4500/- Withholding tax)
03 December 2010
For query one. pls re-think about TDS. Since, normally foregin co. will ask the payment amount and not the invoice less taxes. if it so pls pay only on payment amount. For query two, not required to do so
CAclubindia
