TDS on commission to a foreign parent company

In my opinion, TDS is not deducted on commission paid outside India as per notification no 786. Commission  paid to associates can be covered Transfer Pricing Provision

Regd

Lovenish Bansal

Dear Mr. Lovenish and Sathikonda

Thanks for your valuable inputs.

Does that mean that after withdrawing the circular, the position is that the commission would be subject to TDS? and if yes at what rate. However, I belive that Circular No. 786 did not applied in our case, as it was not export commission which we intend to pay to our foreign parent company.

Mr.Deepak Goel and Mr.Lovenish Bansal

I am herewith attaching a word document which was published in the Hindu Business Line which contains an analysis of a case law an expert who is the director of PriceWaterCooperHouse Pvt. Ltd.,  The said case law in in your favour.  Any how you have to check up the facts of your case whether there are any similarities are existing in your case also when it is compared with the case law discussed.

Best Wishes

Sathikonda

Dear Mr. Sathikonda,

The input provided by you was indeed very helpful. Thank you so much.

May i also know the date of the article in the paper. I mean is it a recent article.

God bless you

Regards

Deepak Goel

Mr.Deepak Goel

I have copied the article from internet.  I do not remeber the date.  Sorry I could not provide you the informlation sought for by you.

Best Wishes

Sathikonda

Dear CA Sathikonda

My case is similar but with difference. In my case I am getting orders from a foreign company. That company has a subsidiary in INDIA. This subsidiary prvides the services of merchendise inspection at the vendor's factory and approves whether or not it can exported to the customer of foriegn company. BEsides, they people follow up reg all the matters related to that order. They want us to pay commission directly to the foregin company in terms of USD. Can you pls confirm whether such a transaction in which the foreign company has a subsidiary company in India which is involved in follows up/ inspections of the irdered goods and commission being paid directly to foreign company comes under the perview of TDS. If yes pls advise in light of relevant sections/provisions of the Income Tax Act. This would be a great help.

Thanks

Pawan Singhal

Export House

Delhi

98118-22266