Production registration fee + service charges paid to non resident

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This discussion clarifies the Tax Deducted at Source (TDS) implications for an Indian company paying a non-resident for product registration services in a foreign country. The consensus is that if the services are rendered entirely outside India and are not taxable in India, then the Indian payer generally has no TDS liability. It's confirmed that this fee is not considered 'fee for technical services' under Section 9 of the Income Tax Act in this scenario.

Chitsimran Singh

Chitsimran Singh (Querist)
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14 June 2023 We want to register our product with department in foreign country.
For which Payment is made to non-resident (No DTAA) who will help to complete the registration. We will pay him lump sum (single) amount for this to him.

What are TDS implication on us being an Indian concern??

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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14 June 2023 AS the income is not taxable in India, there will not be any TDS liability over you.

Chitsimran Singh

Chitsimran Singh (Querist)
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14 June 2023 isn't it Fee for technical service under section 9?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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14 June 2023 No. Section 9 specifies certain types of income that are deemed to accrue or arise in India in certain circumstances. Here the services provided are outside India, not chargeable to tax in India.

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