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Taxes applicable on payment to international artist

Mudit Gupta (Founder) (28 Points)

24 March 2015

Hi,

We are an event management company who are in business of organizing concerts. We are planning to hire an international artist for performing in our upcoming concert in Hyderabad through an agency in US. Neither the agency or artist have an office or ST registration in India.

Payments will most probably be made directly to artists bank account in a bank in US not operating in India.

I want to know do we have to deduct a TDS on this payment and are we liable to pay service tax in India over and above the artist fee?

Thanks ,

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3 Replies

Shiv prakash (000) (87 Points)
Replied 25 March 2015

i think your case falls in Rule 3 (Genral Rule) of Place of Provision os Service Rules, 2012 where location of Service receiver is the place of provision of service.

in your case Artist (Service provider) providing service to you (Service receiver) & your location is in india (in taxable territory) so service tax is applicable and in trems of revers charge you are laible to pay service tax (see Notification No. 30/2012-ST Dated 20-06-2012)

i would like to see opinion of other members also.

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CA JITENDER CHAUHAN (PRACTISING CHARTERED ACCOUNTANT) (56 Points)
Replied 25 March 2015

yes shiv prakash is correct and there liability to deduct tds @ 20.36%

AmaraAgrawal (Others) (32 Points)
Replied 04 May 2020

It depends on how big is the payment, because TDS or Tax Deducted at Source is valid on Recurring Deposits and is deducted at 10% on the interest earned which exceeds Rs. 40,000. I almost got into financial problems a while ago, because I didn't know about this rule. We organized a concert in London, and we used mobile stage hire services. After, when we wanted to make the payment, we didn't know that TDS has to be deducted, so when it all came out, my accountant and I had a lot of work to revise. This is done to protect the interest of lower-income investors, so still better than nothing.