Service Tax:Areas of Concern

Abstract

Due to the economic liberalization, business activities are no longer confined to a boundary of a single Country. Cross border activities, both supply and service are very common now a day. EXIM policy of Government of India has made it easy to import and export of goods and service into and outside India. Now a day many organizations take the service of foreign technical experts for installation, commissioning activities etc. Payment for this 'import of service' needs to be made in foreign currencies as per agreed term and conditions. 'Service Tax' on the value of service needs to be discharged by recipient of service under 'Reverse Charge'. While discharging the payment on services received from the foreign parties, TDS (withholding Tax) needs to be deducted and deposited with the Government of India as per the provisions of the Income Tax Act, 1961.