income earned by forign national on service provided

This query is : Resolved

Suresh Jain (Querist)
Follow

09 May 2009 My client in USA a foreign national (Indian by birth)intends to provide consultancy service to his Indian client. He does not have any office in India. He bills from US and his clients makes payment to his account in US Dollar against the bill. His client says he has to deduct TDS on the amount payable.
1. Is TDS applicable in this case??
2. If deducted how can the same be claimed from I Tax Deptt.as he does not have any PAN in India?
3. Does he need to pay further tax on the billed amount?
4. Is service tax also applicable in this case?

taxindiaconnect

taxindiaconnect (Expert)
Follow

09 May 2009 You need to clarify that what kind of services are being provided. However in the absence of the nature of services I am presuming it to be the services in the nature of consulting and professional. As per article 12 of Double Taxation avoidance Agreement ( DTAA or treaty ) between India and USA, a payment for included services are taxable in other contracting state only if such service make available any technical knowledge to the payer os such services in other contracting state. Thus in this case we have presumed that the service are ordinary service of consulting. The simple consulting services do not make technical knowledge to the payer, hence no TDS is applicable. For example the legal services do not provide any technical skill to the payer to make him competent to start services of his own, while a technical information regarding a software may permit the payer to start the business of his own in India using that information. In such cases the tax would deductible. The short answers to all your queries is as under. .

1) The services are not covered under the definition of technical services with the meaning of article 12 of DTAA between India and USA.
2) No deduction required. This query is not applicable.
3) Not applicable
4) Service tax is applicable as the service provided outside India but consumed in India.

Suresh Jain

Suresh Jain (Querist)
Follow

11 May 2009 Thanks Rajesh.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Summarize this with AI

ChatGPT Perplexity Claude Google AI Grok

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

Lalan Kumar Jha

Vidit Ratanghayra

Suneel Shah

Ravikumar

Ritesh Panpaliya

Subscribe Now

income earned by forign national on service provided

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

Article Assistant

Accountant

GST CONSULTANCY

Manager- Finance and Compliance

CA Final

GST CONSULTANT