PAYMENT TO OPEN AI AND ENVATO ELEMENT

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This query is : Resolved

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This discussion clarifies whether Tax Deducted at Source (TDS) is required for payments made by an Indian company to OpenAI and Envato Elements, particularly when using credit cards. Based on Indian tax regulations and a relevant appeal case, payments for the use of computer software through non-resident suppliers are generally not considered royalties and therefore do not attract TDS. Consequently, Form 15CA and 15CB are typically not needed for these transactions.

Saurabh Bhatia

Saurabh Bhatia (Querist)

05 November 2024 Our company is using the service from Open AI and Envato (Both are NR and issuing bills in foreign currency), should we need to deduct TDS?
Payment made via credit card 15CA and CB is required?
This will also be covered under Appeal No: IT No. 3234/Bang/2018.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

10 November 2024 Amounts paid by resident end-users to non-resident manufacturers/suppliers as consideration for computer software use through, do not constitute royalties payment for copyright use. Consequently, payments do not give rise to taxable income in India. Persons u/s 195 not liable to deduct TDS on these payments.

15CB not required.

Saurabh Bhatia

Saurabh Bhatia (Querist)

12 November 2024 thanks you for your response.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

12 November 2024 You are welcome...
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