ON THE BASIS OF ABOVE CIRCULAR ONE PARTY GIVEN US A CERTIFICATE FOR DEDUCTION OF TAX AT SOURCE ARE NOT APPLICABLE TO FOREIGN SHIPPING COMPANIES OR THEIR AGENT IN RESPECT OF PAYMENTS MADE ON ACCOUNT OF CARRIAGE OF GOODS IN INTERNATIONAL TRAFFIC
IS IT CORRECT ? WE HAVE TO DEDUCT TDS OR NOT FOR THE FINANCIAL YEAR 2007-2008 PLEASE TELL US
WHAT IS THE STATUS OF THIS CIRCULAR IN FY 07-08 MEANS SOME CHANGES MADE IN THIS CIRCULAR OR NOT
15 November 2007
To the best of my knowledge, there is no change in the subject matter of the circular No.723 dt.19.09.1995, and the TDS is not required to be made for payments made to foreign shipping companies or their agents.
16 November 2007
Circular : No. 723, dated 19-9-1995. TDS provisions will not apply - The provisions of section 172 are to apply, notwithstanding anything contained in other provisions of the Act. Therefore, in such cases, the provisions of sections 194C and 195 relating to deduction at source are not applicable. The recovery of tax is to be regulated, for a voyage undertaken from any port in India by a ship, under the provisions of section 172. There would be cases where payments are made to shipping agents of non-resident ship-owners or charterers for carriage of passengers, etc., shipped at a port in India. Since, the agent acts on behalf of the non-resident ship-owner or charterer, he steps into the shoes of the principal. Accordingly, provisions of section 172 shall apply and those of sections 194C and 195 will not apply. THE STATUS OF THIS CIRCULAR IN FY 07-08 is same. No CHANGES MADE IN THIS CIRCULAR .As section 172 still govern method of recovery of tax from foreign companies.Therefore you are not required to deduct the TDS.
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