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

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

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!


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