Sec 195(6) Read with New Rule 37BB
This query is : Resolved
17 April 2009
Dear Sir,
As per New Rule 37BB, information on payments to Non-Residents & Foreign Companies has to be provided in Form 15CA & Form 15CB.
Which payments are covered ?
1. Are payments to Foreign Companies for import of Raw Materials etc are covered ?
2. Are payments for import of Capital Goods covered ?
3. Is Commission paid to Foreign Agents covered ?
Note: These Foreign Companies/Agents donot have any PE (Permanent Establishment) in India.
Earliest response is anticipated.
Regards
G. Sharma
As per New Rule 37BB, information on payments to Non-Residents & Foreign Companies has to be provided in Form 15CA & Form 15CB.
Which payments are covered ?
1. Are payments to Foreign Companies for import of Raw Materials etc are covered ?
2. Are payments for import of Capital Goods covered ?
3. Is Commission paid to Foreign Agents covered ?
Note: These Foreign Companies/Agents donot have any PE (Permanent Establishment) in India.
Earliest response is anticipated.
Regards
G. Sharma
20 May 2009
Dear Sir,
As per New Rule 37BB, information on payments to Non-Residents & Foreign Companies has to be provided in Form 15CA & Form 15CB.
Which payments are covered ?
1. Are payments to Foreign Companies for import of Raw Materials etc are covered ?
2. Are payments for import of Capital Goods covered ?
3. Is Commission paid to Foreign Agents covered ?
Note: These Foreign Companies/Agents donot have any PE (Permanent Establishment) in India.
Earliest response is anticipated.
Regards
G. Sharma
As per New Rule 37BB, information on payments to Non-Residents & Foreign Companies has to be provided in Form 15CA & Form 15CB.
Which payments are covered ?
1. Are payments to Foreign Companies for import of Raw Materials etc are covered ?
2. Are payments for import of Capital Goods covered ?
3. Is Commission paid to Foreign Agents covered ?
Note: These Foreign Companies/Agents donot have any PE (Permanent Establishment) in India.
Earliest response is anticipated.
Regards
G. Sharma
23 July 2025
Dear Mr. Girish Sharma,
Thank you for your detailed query. You're right in referring to **Section 195(6)** read with **Rule 37BB**, which governs the requirement of **Form 15CA / 15CB** for **remittances to non-residents**.
Let me clarify your questions point by point as of the latest applicable provisions.
---
## ✅ **Section 195(6) and Rule 37BB: Summary**
* Any person responsible for making a payment to a **non-resident or foreign company** (whether taxable or not) must **furnish information in Form 15CA**.
* In **certain cases**, a **CA certificate in Form 15CB** is also required.
* **Rule 37BB** lists **33 categories of payments** that are **exempt** from Form 15CA/15CB compliance.
---
## ✅ Your Specific Questions:
### 1. **Are payments to Foreign Companies for import of raw materials covered?**
❌ **No**, these are **excluded** from Form 15CA / 15CB as per Rule 37BB.
> **Rule 37BB(3), item 3**:
>
> > "Payment for imports" — specifically **imports of goods, including raw materials** — is **exempt** from Form 15CA/CB.
✅ No Form 15CA or 15CB is required.
---
### 2. **Are payments for import of capital goods covered?**
❌ **No**, similar to raw materials, **capital goods** also fall under **“imports”**, hence:
> Also covered under **Rule 37BB(3), item 3** — **exempt** from 15CA/15CB.
✅ No Form 15CA or 15CB is required.
---
### 3. **Is commission paid to foreign agents covered?**
✅ **Yes**, this is **covered**.
* Commission to foreign agents is **not excluded** under Rule 37BB.
* Since it’s a **remittance to non-resident for services**, **Form 15CA is mandatory**, and **Form 15CB** is required **if the remittance exceeds ₹5,00,000** in a financial year.
> Even though the foreign agent has **no Permanent Establishment (PE)** in India and income may not be taxable under **DTAA**, you **still need to file Form 15CA (Part D)** along with **Form 10F, TRC, and a declaration**.
---
## ✅ Summary Table:
| Nature of Payment | Form 15CA/CB Required? | Reason |
| ------------------------------------ | ---------------------- | --------------------------------------------------------------------------------- |
| Import of raw materials | ❌ No | Covered under Rule 37BB (exempt category) |
| Import of capital goods | ❌ No | Also covered under Rule 37BB (exempt category) |
| Commission to foreign agents (no PE) | ✅ Yes | Not exempt; income may not be taxable, but declaration and Form 15CA still needed |
---
## 📌 Compliance Tip:
If the commission is **not taxable in India** due to **DTAA + no PE**, and proper documents are maintained:
* You can file **Form 15CA – Part D** (for amounts not chargeable to tax)
* **Form 15CB** is **not required** in that case
---
## 📂 Documents Recommended for Foreign Commission Remittance:
* **TRC (Tax Residency Certificate)** from foreign agent
* **Form 10F**
* **Declaration** that agent has **no PE in India**
* **Copy of agency agreement or invoice**
---
Let me know if you’d like:
* A sample declaration from the foreign agent
* A draft of Form 15CA (Part D)
* A list of all 33 exempt categories under Rule 37BB
Happy to help!
Thank you for your detailed query. You're right in referring to **Section 195(6)** read with **Rule 37BB**, which governs the requirement of **Form 15CA / 15CB** for **remittances to non-residents**.
Let me clarify your questions point by point as of the latest applicable provisions.
---
## ✅ **Section 195(6) and Rule 37BB: Summary**
* Any person responsible for making a payment to a **non-resident or foreign company** (whether taxable or not) must **furnish information in Form 15CA**.
* In **certain cases**, a **CA certificate in Form 15CB** is also required.
* **Rule 37BB** lists **33 categories of payments** that are **exempt** from Form 15CA/15CB compliance.
---
## ✅ Your Specific Questions:
### 1. **Are payments to Foreign Companies for import of raw materials covered?**
❌ **No**, these are **excluded** from Form 15CA / 15CB as per Rule 37BB.
> **Rule 37BB(3), item 3**:
>
> > "Payment for imports" — specifically **imports of goods, including raw materials** — is **exempt** from Form 15CA/CB.
✅ No Form 15CA or 15CB is required.
---
### 2. **Are payments for import of capital goods covered?**
❌ **No**, similar to raw materials, **capital goods** also fall under **“imports”**, hence:
> Also covered under **Rule 37BB(3), item 3** — **exempt** from 15CA/15CB.
✅ No Form 15CA or 15CB is required.
---
### 3. **Is commission paid to foreign agents covered?**
✅ **Yes**, this is **covered**.
* Commission to foreign agents is **not excluded** under Rule 37BB.
* Since it’s a **remittance to non-resident for services**, **Form 15CA is mandatory**, and **Form 15CB** is required **if the remittance exceeds ₹5,00,000** in a financial year.
> Even though the foreign agent has **no Permanent Establishment (PE)** in India and income may not be taxable under **DTAA**, you **still need to file Form 15CA (Part D)** along with **Form 10F, TRC, and a declaration**.
---
## ✅ Summary Table:
| Nature of Payment | Form 15CA/CB Required? | Reason |
| ------------------------------------ | ---------------------- | --------------------------------------------------------------------------------- |
| Import of raw materials | ❌ No | Covered under Rule 37BB (exempt category) |
| Import of capital goods | ❌ No | Also covered under Rule 37BB (exempt category) |
| Commission to foreign agents (no PE) | ✅ Yes | Not exempt; income may not be taxable, but declaration and Form 15CA still needed |
---
## 📌 Compliance Tip:
If the commission is **not taxable in India** due to **DTAA + no PE**, and proper documents are maintained:
* You can file **Form 15CA – Part D** (for amounts not chargeable to tax)
* **Form 15CB** is **not required** in that case
---
## 📂 Documents Recommended for Foreign Commission Remittance:
* **TRC (Tax Residency Certificate)** from foreign agent
* **Form 10F**
* **Declaration** that agent has **no PE in India**
* **Copy of agency agreement or invoice**
---
Let me know if you’d like:
* A sample declaration from the foreign agent
* A draft of Form 15CA (Part D)
* A list of all 33 exempt categories under Rule 37BB
Happy to help!
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Error whilst validation
- Required to submit form 10IEA_fy 24-25
- ITR2 Not Validating Short Term Capital Loss as value less than zero
- ITR3
- Rebate u/sec. 87A manually
- ERRROR IN ITR2 FILING
- GSTR ITC relationship
- NRE account -account type issue in AY2025-26 Tax Filing
- Form 15G eligibility for individuals
- PAN for Municipal Corporation
- Requirement of MGT-14 for resolution passed at EGM for appointment of auditor
- PT interest calculation
- ICWAI-Final
- List of Platform for crypto trading
- Gratuity Fund Audit & ITR
- RCM gst liability and return query
- Hash value error indicated whilst validating itr 2 online
- Allowability of itc on building materials etc for resorts
- HSN details in Table 12 for gstr1
- Profit transfer entry from one branch to head office branch
Trending Online Classes
CAclubindia
