Tds (international taxation)

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Querist : Anonymous

Querist : Anonymous (Querist)

29 April 2013 On the basis of following certificate issued by ITO (International Taxation)-I KOchi, should not we deduct TDS on services given by IAL INDIA LIMITED (deductee claiming such) for our rice export shipments abroad ???? They offer terminal handling to sea freight operations.

Thanks in advance.....

CERTIFICATE-
" Name and address of the Non Resident Company-
IAL Container Line(UK) Ltd. 5, New Street Square, London EC4A 3TW, United Kingdom

Name and address of the Indian Agent -
IAL INDIA LIMITED 6th Floor, Metro Plaza, Market Road, Kochi, 682014.

As per the documents filed by the Indian agent namely M/s IAL INDIA LIMITED, it is found that the Non-resident company M/s IAL Container Line(UK) Ltd, London has its place of Effective Management in UK. Thus the Income earned by way of shipping business by the above Non resident Company is not taxable in India as per Article 9 of the Double Taxation Avoidance Agreement between India and United Kingdom. (Notified in Notification No. GSR 91(E) dated 11/02/1994).

The Non- resident Company is, therefore, entitled to 100% relief on profits from operation of ships in international traffic. This exemption certificate is not applicable in respect of earnings made by the non resident Company from the INLAND/COASTAL operations. "

VISHRUT

VISHRUT (Expert)
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29 April 2013 As per the DTAA between india and UK any income by a shiiping company shall be taxable in the country where place of effective management is situated.

Here it is clearly stated that the place of effective management for the non resident company is uk only and hence this income does not accrue or arise in India and not taxable in India.

On the basis of same principle no TDS is required to be deducted at the time of making payment to the Indian company for its freight & Handling charges.

Querist : Anonymous

Querist : Anonymous (Querist)

30 April 2013 Thanks Vishrut...:-)

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