Raman (Accounts Executive) (24 Points)
04 June 2010Hi,
If an Indian company is appointing a Foreign company as its sponsor for a period of six months and paying charges in foreign currency also then whether the Indian company is liable to pay the service tax or not.
Please send your comments in detail.
Raman
chandrashekara.R
(CA Final)
(55 Points)
Replied 07 June 2010
Dear Raman
as you might be aware the service tax liability in case of sponsorship services is cast upon the service receiver, even in a case where the services are procured by an indian company form the foriegn company (which will be regarded as import of service). hence again the service receiver is liable to pay service tax. Refer TRU No 334/1/2007 dated 28.02.2007, where the same had been clarified.
the liability in such case shall be paid in cash in GAR 7 challan, however the amount paid can be availed as cenvat credit your in your books on the basis of such payment challan.
Excel Mastery Program
CAclubindia
