R&D Cess on Witholding Tax, Other Topics

[Mr.G.R.Prabhu Mr. G.R.Prabhu]

On import of technology, if Witholding tax is to be borne by the Indian importer, then for payment of R&D cess is the grossed up value (taken for calculation of Witholding Tax) to be considered or the net invoice value is to be considered?

Similarly for calculation of Service tax as deemed service provider, on such import, is the grossed up value to be taken.

 

 

Posts / Replies

[CA Rachit Agarwal]

Witholding Tax is the tax amount which is paid on behalf of Non-Resident. It is immaterial whether borne by the service provider (Non-Resident) or Importer. Witholding Tax is like TDS. Value of Services is equal to the amount credited to the account of non-resident plus tax deposited.

Hence for the calculation of Service Tax, gross amount is to be taken.

[Mr.G.R.Prabhu Mr. G.R.Prabhu]

The question is what amount should be taken for calculating R & D cess on import of technology when invoice amount is grossed up and tax is borne by the Importer.

Kindly clarify.