Hi All,
I work in a KPO which is a India based Pvt Ltd Co. Its a 100% subsdiary of US based company.Recently the US parent has entered in to an agreement with another company at Delhi (subsdiary of another US based parent) for providing certain support functions (IT, HR ,admin) for their upcoming facility at Delhi.The services would typically fall in to the Support Business category .
Our company would provide this support function on behalf of the US parent .We would be remunerated by the US parent on the basis of cost incurred by us plus a certain %(say $6000) . While the US parent would be remunerated by a heigher sum by the US based parent of Delhi co. (Say $ 10,000/-)
My questions are,
1) Service tax would be paid on what amount $10,000/- or $6000/- ?
2) Who is liable to pay we or our US based parent ?
3) Can you suggest a invoicing pattern by which we can reduce the tax liability.(i.e. instead of paying tax on $10000 ST should be payable on $6000/-) ?
first of all clarify whether you r providing services to ur US based parent co. or the other co. directly.............. secondly which of ur co. wud raise the invoice to the client co. ........ u can see Service Tax (Determination of Value) Rules, 2006 for the same
..............the value of consideration is equals to gross amount charged by the service provider from the service reciever ....... so the above details r required
gaurav gupta
CAclubindia
