Applicability and credit of service tax, Service Tax

[KANTI CHAUHAN]

Dear Sir, We are dealing in all types of IT related services.Recenty our staff has got training from Australian based company for which they charged us US$ 30000.Are we liable to pay service tax & if yes can we get credit of the service tax paid since its related to our business. Whether we have to deduct any TDS while making any foreign outward remmitance & at what rate.

Posts / Replies

[Ravi Chopra]

Regarding, Service Tax, since the services are in the nature of commercial coaching or training, the same is not liable to tax in India if wholly provided outside India. On the other side, if it is held as "consulting engineering service" the same is taxable in India as recipient of service is situated in India. Yes, if you pay service tax on such service, the same qualifies as Input service if all other conditions are satisfied for the purpose of Cenvat Credit. Regarding Income Tax, apparently, you may not be liable to deduct TDS. But, further study is necessary in respect of the transaction and DTAA provisions read with Income Tax Act, 1961.