1. Party Involved: Client in India, ABC Canada, ABC India (Subsidiary of ABC Canada)
2. Contract: ABC receives the contract from Client in India. Afterwards, it fully transfers the same to its Subsidiary ABC India.
3. Transaction: ABC Canada raised the invoice to Client in India and other side ABC India rasied the invoice to ABC Canada.
4. Service Tax: ABC Canada need to pay the Service Tax on receipts basis whereas ABC India will pay the same at the time of Invocing to ABC Cananda as it is Inter Company transaction for them.
5. Problem : If Client in India deduct 50% money of Invoice then ABC Canada will pay ST accordingly and return only the 50% of amount to ABC India as the same it receive from client.
6. Query: As now ABC India only Received 50% amount so now what we do with service tax have already paid by 50% more over such invoice? Is there any relief or refund .. regarding this, please help…..
19 February 2010
Under reverse charge the person in India is to pay. Therefore the client has to pay the ST if liable. What is the service provided and is it liable under sec66A is the question.
As far as associates enterprsioes are concerned the date of making entry/ provision is the date relevant for payment of ST.
22 February 2010
If ABC India has already paid the 100% service tax at the time of Invoice then what is the relief to ABC India if they receive only 50% from ABC Canada as per above query?
CAclubindia
