DTAA

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@ri... (Querist)

07 October 2009 X Ltd (a USA Co.) sells software/related products to an Indian Co., for which the payment is to be made by the Indian Co.

X Ltd has a Subsidiary Co. in India, there is no income attributable to such PE nor it is involved in this transaction.

Now my query is, whether having such a Subsidiary Co. constitute a PE in India under USA-India DTAA.
If yes what will be the TDS % to be with held by the Indian Co. while making payment.

Kindly refer similar rulings/judgements, if any.

Thanks
Arihanth

sunny bansal

sunny bansal (Expert)

07 October 2009 hello mr.arihanth
as per the provision of incometax act , it has been mentioned in the definition of permanent establishment that if one enterprises hold more than 26% share capital of another enterprises , it shall be consisered as "PE" and accordingly provision of transfer pricing is applicable. hence relation ship exist between the foriegn co. & its subisidiary but not between foriegn co.& indian company and its subisy & indian comapny. therefore it this transaction transfer pricing is not attracted.

@ri...

@ri... (Querist)

15 October 2009 Thanks for the reply but I think I was not clear in my query last time.
Kindly help me.....

Query: X Ltd (a USA Co.) sells software/related products to an Indian Co., for which the payment is to be made by the Indian Co.

X Ltd has also a Subsidiary Co. in India, there is no income attributable to such Subsidiary (PE)

What will be the TDS % to be with held by the Indian Co. while making payment.
- I. If income is attributable but cannot be easily determined.
- II. If income is not attributable.

Does section 164 -Maximum Marginal rate comes here ?

Kindly refer similar rulings/judgements, if any.

This is very urgent, kindly help me.

Thanks & Regards
Arihanth

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