COMMISSION ON SALES PAID TO FOREIGN AGENT IN FOREIGN CURRENC

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This query is : Resolved

CMA ASHISH (Querist)

13 May 2009 Hi all,

We are manufacturer of any item in India and exporting goods outside India to various parties as under through an agent e.g. MR.X who is a foreigner, We are paying Commission to Mr.X for Sales done to various parties in India and abroad.

What is the rate of TDS for commission paid to such agent ?

Whether we can pay Foreign Currency as commission to Mr.X ? How?

If there is no TDS on Commission paid to Foreign agent as per Income tax circular no 786 dtd 07-02-2000

Any threshold limit of percentage of commission for paying to foreign agent ?

or

Any threshold limit of commission in INR for paying to Foreign Agent ?

Whether we have to do an agreement or MOU with the foreign Agent or not ?

Please guide me at the case is urgent.

Thanks

taxindiaconnect

taxindiaconnect (Expert)

13 May 2009 The TDS is not applicable in this case as per circular no 786 as mentioned by you yourself. There is a limit of percentage of sales from FEMA perspective, which you r bank can tell you. A agreement witht the party will definitly be of great help.

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