If a payment to a foreign consultant does not require aTDS (per DTAA) does it automatically mean no service tax? That is, if a payment is non taxable then does service tax get still attracted?
V.ganapathy (consultant) (87 Points)
13 June 2011If a payment to a foreign consultant does not require aTDS (per DTAA) does it automatically mean no service tax? That is, if a payment is non taxable then does service tax get still attracted?
U S Sharma
(glidor@gmail.com)
(21056 Points)
Replied 13 June 2011
service tax and TDS both are different laws and provisions, service tax has its own set of rules, and applicable at all import of services.
CA ADITYA SHARMA
(CA IN PRACTICE )
(16719 Points)
Replied 13 June 2011
no it not means that service tax is not to be charged
valji
(Accounts manager-MBA)
(2150 Points)
Replied 13 June 2011
service tax is diffreant aspect then TDS,but one thing is kept is mind whenever any service tax is charged that person in most of case liable to service tax except some exemption of ser\vice
for example as per DTAA & sec if any foreign commission is paid on Export sales to any foreign indiviual is exempt from TDS
but in service tax some critria for exemption the exemption is limit up to 10% i.e commission should not more then 10% as per import of service
naga kiran kumar
(Articles Completed)
(78 Points)
Replied 13 June 2011
I agree that Income tax and service tax are completely different.
But the given case relates to import of service and so the service tax is payable by Service receiver ( an exemption to the ruler on whom service tax is to be charged ).
And TDS should be deducted on such foreign service provider according to the rates given in section 195 or at the rates specified in respective DTAA's.
V.ganapathy
(consultant)
(87 Points)
Replied 14 June 2011
can someone read the following circular issued in 2003 by Govt ..Is this still valid afte sec 66A?one infers that during export of service if some service is imported in connection with the same project/foreign destination then it does not attract service tax..refer: https://www.servicetax.gov.in/circular/st_circ_56-2k3.htm
The Board has examined the issue. In this connection I am directed to clarify that the Service Tax is destination-based consumption tax and it is not applicable on export of services. Export of services would continue to remain tax-free even after withdrawal of notification no. 6/99 dated 9.4.99. Further it is clarified that service consumed/provided in India in the manufacture of goods which are ultimately exported, no credit of service tax paid can be availed or reimbursed at present as inter-sectoral tax credit between services and goods are not allowed.
4. Another question raised is about the taxability of secondary services which are used by the primary service provider for the export of services, Since the secondary services ultimately gets consumed/merged with the services that are being exported no service tax would be leviable on such secondary services. However in case where the secondary service gets consumed in part or toto for providing service in India, the service tax would be leviable on the secondary service provider. For this purpose both primary and secondary service providers would maintain the records deemed fit by them to identify the secondary services with services that are being exported.
GSTR 9 and 9C for FY 23-24 as amended by Notification 12/2024 dated 10th July 2024(with recording)
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