Does foreign company have to file a retun in India?

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

30 June 2011 I am working with a MNC company. Recently we got PAN no for our US based parent company. As of now US company does not have any Income in India however we need to pay them certain amounts in USD towards reimbursement of expenses which has been paid by our parent company on our behalf to US vendor.

Does now our parent company has to file return in India ?? Please advise ??

Thanks

CA MANOJ GUPTA

CA MANOJ GUPTA (Expert)
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30 June 2011 U HAVE NOT GIVEN THE DETAILS OF ESTABLISHMENT IN INDIA
WHETHER IT IS A LIASION OFFICE OR BRACH OFFICE

CA MANOJ GUPTA
JODHPUR
09828510543

CA. Anuj Gupta

CA. Anuj Gupta (Expert)
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03 July 2011 The exact nature of expenses for which the payment has been made by the US parent company needs to be seen.

Presume that if the expenses had been paid directly then whether any TDS liability would have been there or not.

If the foreign Company is in receipt of any income from India then it is mandatory to file return of income.

Anuj
091-9810106211

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Querist : Anonymous

Querist : Anonymous (Querist)

04 July 2011 US company does not have any office / branch here at India.
My company is 100% subsidiary of US company.in other words 98% share of my Indian company is owned by US company.

The nature of expenses are reimbursement by nature. WE have bought certain material from one US company ..& my parent company has paid them which later on we have reimbursed to parent company.

The TDS has been deducted on this payment @ 10.55 as our US company have the PAN.

Now please advise whether US company have to file return here in India.

Thanks in anticipation !!

CA. Anuj Gupta

CA. Anuj Gupta (Expert)
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04 July 2011 Yes , as per Indian Income Tax Act, 1961, the US Co. needs to file return of income in India.

Also TP provisions shall also apply in the said transaction including reporting of the transaction in Form 3CEB.

Anuj
091-9810106211

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