Query - pertain to non resident commission agents:-
This query is : Resolved
CA.Rakesh Verma
(Querist)
02 January 2015
We are manufacturer and exporter of Agro chemicals. We make commission payment to a marketing Agent overseas (anywhere world) and some of them required paying commission to third country/other global markets.
1.They are not our employee and don’t have a PAN card issued by Indian Income Tax Authorities.
2.They will be paid commission as a percentage of Export sales after due realization from the customers/buyers.
3.The agent neither has any PE in India nor any Business connection. Agent provides all the services outside India and received payment outside of India.
As per decided in various cases and tax law that where a non-resident agent of an Indian company operates outside country and payment is remitted directly abroad, hence, merely because an entry in books of Indian Company is made, it does not mean that the non-resident has received any payment in India
Our queries are:-
1.What status about of TDS? Weather TDS required or not.
2. What are mandatory documents required from the agents for making such payment of commission without TDS ?
3.If TRC not available with Non-resident agent than how to determine tax residency of agent? What valid documentary evidence can be obtained?
1.They are not our employee and don’t have a PAN card issued by Indian Income Tax Authorities.
2.They will be paid commission as a percentage of Export sales after due realization from the customers/buyers.
3.The agent neither has any PE in India nor any Business connection. Agent provides all the services outside India and received payment outside of India.
As per decided in various cases and tax law that where a non-resident agent of an Indian company operates outside country and payment is remitted directly abroad, hence, merely because an entry in books of Indian Company is made, it does not mean that the non-resident has received any payment in India
Our queries are:-
1.What status about of TDS? Weather TDS required or not.
2. What are mandatory documents required from the agents for making such payment of commission without TDS ?
3.If TRC not available with Non-resident agent than how to determine tax residency of agent? What valid documentary evidence can be obtained?
CA R SEETHARAMAN
(Expert)
02 January 2015
1. The payments is for services rendered outside India which is not taxable in India hence no TDS applicable.
2. No further documents required. Whatever documents(non-resident agent operates out side country and payment is remitted directly abroad) you have is enough.
3. No TRC required.
Your views on decided various cases is right.
2. No further documents required. Whatever documents(non-resident agent operates out side country and payment is remitted directly abroad) you have is enough.
3. No TRC required.
Your views on decided various cases is right.
Rupesh Jain
(Expert)
02 January 2015
PAYMENT FOR O/S INDIA FOR EARNIN O/S INDIA NOT TAXABLE IN INDIA AND NO TDS REQUIRED.
YOU CAN TAKE THE ANY RESIDENT PROOF OF THE AGENT IT HELP IN INCOME TAX PROCEEDING
YOU CAN TAKE THE ANY RESIDENT PROOF OF THE AGENT IT HELP IN INCOME TAX PROCEEDING
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