TDS for payments made to foreign company without PE in India and no PAN number

Hello all

My company purchased a software license from a company based in Ireland and uses the software in India. We received a letter from the Ireland company that they don't have a Permanent Establishment in India and hence, we should not deduct any tax at source.

However, on various discussions I came across about the tax laws, they suggest different rates for deducting TDS for such cases like 10.5% in they have PAN in India and 20% if they don't have PAN. But these discussions were from 3-4 years ago.

As per latest guidelines, Could somebody please let me know if I have to deduct TDS or not? If yes, at what rate? Would be grateful if you could tell me the reference so that I can state it to the company in Ireland

Thanks in advance

Best Regards,

Vamsi