A company from California,USA, provides website development services to Indian Company. They do not have permanent establishment in India. Kindly provide suggestion on the following quries.
1) Whether TDS is applicable? if yes at what rate?
2) Is PAN of foreign entity necessary for claiming TDS, if deducted by the Indian Company?
3) Is reverse charge mechanism applicable to the remitting Indian Company?
23 November 2012
yes TDS is applicable u/s 194J @ 10%(i.e. Professional services or maintances)
yes pan is necessary otherwise tds rate will be @ 20%
yes reverse charge applicable to indian company.
still indian comapny has no liability for tds. it a liability of foreign comapny to deduct tds. if foreign company has not deducted tds then you(indian company) have paid higher tax.
CAclubindia
