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DTAA

This query is : Resolved 

What is the meaning of "Independent Personal Service' Article in DTAA?
Please explain the meaning of this article in simple words, if possible with example.

Thanks in advance.


It's professional or consultancy services.
Such services provided to other country is taxable based on residential status of the person rendering the service.

Then if Resident of UK providing technical service to Indian Co. to inspect in a co. based in UK (Client of Indian Co.), whether TDS is required to be deducted by Indian Co.??

No TDS applicable if such services rendered outside India by non resident for earning income outside India by the company.

The Gujarat High Court observed that the
payments made by the taxpayer were for technical
services provided by a non-resident. It was for
providing services to be utilised for serving the
taxpayer’s foreign clients. Thus, FTS was paid by
the taxpayer for the purpose of making or earning
any income from any source outside India.
Accordingly, the source of income namely the
taxpayer's customers were the foreign-based
companies4
. Consequently, the tax was not
required to be deducted on payment of such FTS.

Thank you very much sir..
Can you please provide the case details as mentioned above?
Which documents are required by Indian Co. to claim such expenses from non resident?

. The Supreme Court in the
case of GVK Industries Ltd5 while dealing with the
exception under Section 9(1)(vii)(b) of the Act
observed that such exception applies to a situation
when fee is payable in respect of services utilised
for business or profession carried out by an Indian
payer outside India or for the purpose of making or
earning of income from any source outside India.

Agreement copy and invoice copy are the documents required.


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