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Foreign Remittance and TDS U/S 195

This query is : Resolved 
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(Querist)
11 December 2009 1) Parentco. is a foreign company which is providing database services (Subscription of Magazines to the Libraries of Educational institutes and Companies) in India directly.



2) Indian co. 100% subsidiary company of Parent Co.



3) Indian Subsidiary acts as a facilitator which raises invoices and collects payments from Indian Customer on behalf of Parent Co.



4) Indian company provides these services (Mentioned under Point no. 3) to foreign company on commission basis i.e it remits the collection made on net of Commission basis.



In the light of above Question arises-

a) Whether Remitance made by Indian Subsidiary would be liable to be taxed in India?

b) if yes then the basis of that and Rate
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Rasesh

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Rasesh (Expert)
12 December 2009 In Most cases, commission is exempt from tds. However, refer to the relevant DTAA for confirmation.

However, I reiterate, commission is normally exempt from tax.
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