Service tax and income tax

Krish (Partner) (24 Points)

31 October 2011  

I have a peculiar situation.

I started a company to provide implementation services for an ERP application.

However, I got the following order which I am eager to deliver, because it will open up opportunity in India later.

My client is based overseas and needed a specific resource on 4 months retainership and will be paying me in USD.

Since I did not have that specific resource, I sub-contracted the assignment to another company based overseas to assign one of their resource and get the work done.

PLEASE NOTE : The receiver and delivery of the service is being done outside INDIA, but under the name of my company (i.e the Receiver has contracted the assignment with me and I in turn have raised the purchase order at a nominal lower price to delivery provider)

My queries are : a)  Will I be liable for Service Tax ?

                              b) Will I need to deduct any TDS when I pay to the sub-contractor. The sub-contractor does not have a company in India and does not have any business that compels them to seek PAN number or establish a company here.

Thanks in Advance..

Regards,

Krish