12 December 2012
One of our client using software which is operated by Australian company and they are charging maintenance charges of that software. which is paid by us in foreign currency.
that company doesn't having any establishment in india. whether this is liable to TDS & service tax.
13 December 2012
In my opinion, the Tds has to be deducted as the nature of payment is in nature of royalty and hence tds should be deducted under section 195. Service tax also needs to deduced as per reverse charge mechanism. However if DTAA is there in place with that country, than tax treatment shall be done as per DTAA.
CAclubindia
