Payment to nri

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lokesh chand (Querist)
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04 May 2017 we hire a consultant which is retired govt official working in Germany. we paying him in India rupees and in Indian account but now he told us that he is NRI from Last 2 years what to do. as we are paying him more than 2000 USD every month. as a service tax law rule person should be registered under service tax but we did not know that he is NRI how to escape,
And now that person is enforcing us that please half payment in Indian rupee and a half in USD, what to do now kindly please explain.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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04 May 2017 As the consultant is NRI you are liable to pay service tax under RCM, irrespective of the currency in which payment is made.

lokesh chand

lokesh chand (Querist)
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04 May 2017 is it possible to pay half in indian rupees and a half in USD as he also getting a pension for which he already filing ITR and saying he also paying tax there also?
how to process payment and what documentation should I required and maintain.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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04 May 2017 The income earned is taxable in the resident country irrespective of currency in which it is paid. In India deduct TDS u/s 195 including for Ruppee payment. You need invoice and agreement for payment.

lokesh chand

lokesh chand (Querist)
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04 May 2017 Dear Sir,
Than for half payment we deduct 10% and on half we deduct 20%.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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05 May 2017 For entire payment 195 TDS applicable.

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