Foreign payment

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This query is : Resolved

GAURAV VERMA (Querist)

08 August 2012 Is there is any liability to deduct tax at source for payment made to foreign company for purchase of machinery spare parts

Amol S Joglekar

Amol S Joglekar (Expert)

08 August 2012 As such NO. Section 195 is the hindrance. Get a certificate by chartered accountant.

CA Manikandan.A.V

CA Manikandan.A.V (Expert)

08 August 2012 Sec 195 is applicable only when there is accrual of taxable income to a non resident in India. If there is DTAA, it should also be considered. If the non resident got PAN in India, then tax TDS at the rate as per the Act or DTAA is to be deducted otherwise 20%.

Normally for purchase transactions TDS is not applicable, if no TDS, no form 15CA or 15 CB required.

Arihanth Jain

Arihanth Jain (Expert)

09 August 2012 My views:
1. Whether TDS applies or not, form 15cb/ca complaince may be required. It is not directly related to TDS.
2. Present case, if recipient has PAN, then TDS shall be Nil. However form 15cb is required.

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