Applicability of Section 195 on payments in foreign exhcange

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Ashutosh Deolekar (Querist)
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06 January 2010 I seek expert advise on the following issue:

An Indian company, acting as an indenting agent for a foreign supplier, wants to remit money to a trade fair exhibitor based abroad, for booking a stall, on behalf of the foreign supplier, in a trade fair to be held in India. The amount is to be reimbursed by the foreign supplier at a future date.

Whether tax has to be deducted on such payment and at what percentage?

Thank you.

UMA SHANKER SHARDA

UMA SHANKER SHARDA (Expert)
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06 January 2010 As per my views, its not an expenditure and is a transaction of advance nature.

Ashutosh Deolekar

Ashutosh Deolekar (Querist)
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08 January 2010 Thank you Mr. Sharda.

I endorse your view. The UK based event organiser is willing to issue certificates of 'No Permanent Establishment in India' and 'Beneficial Ownership of Income' which will further strengthen our stand in view of the provisions of Article 23 of the DTAA between India and UK.

Thank you.

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