Tds liability on payment of premium to marine insurance co.
This query is : Resolved
PRANAV BOTHRA
(Querist)
30 October 2012
Hi,
Is there Liability to deduct TDS on Payment of Premium paid by resident company to Marine Insurance Company (Non Resident) u/s 195 i.e. Deduction of Tax at source from other sums to Non Residents ?
Is there Liability to deduct TDS on Payment of Premium paid by resident company to Marine Insurance Company (Non Resident) u/s 195 i.e. Deduction of Tax at source from other sums to Non Residents ?
CA CS Amit S. Kedia
(Expert)
30 October 2012
The TDS will not be dedcuted only if-
1. The NR company submits TRC to resident company
2. It is exempted from tax under DTAA
3. They certify that we do not have any Permanent Establishment in India as defined in DTAA.
1. The NR company submits TRC to resident company
2. It is exempted from tax under DTAA
3. They certify that we do not have any Permanent Establishment in India as defined in DTAA.
PRANAV BOTHRA
(Querist)
30 October 2012
Thank You Sir For Reply,
What you meant by TRC in your first point.
and as to your second reply the DTAA agreement is silent for Premium receipt by insurance company .
I want to add one one query to this same whether Service Tax will be applicable to this premium, as per my view it wont be as the service is not rendered in India only rendered in Sea & till ship reaches Port in India
What you meant by TRC in your first point.
and as to your second reply the DTAA agreement is silent for Premium receipt by insurance company .
I want to add one one query to this same whether Service Tax will be applicable to this premium, as per my view it wont be as the service is not rendered in India only rendered in Sea & till ship reaches Port in India
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CA CS Amit S. Kedia
(Expert)
30 October 2012
From the current financial year a new clause 4 under section 90 has been added which requires every non resident to submit tax resident certificate from the tax authority of the country in which it resides.
Insurance premium income is business profit and included in article 7 in most of the DTAAs.
Service tax will have to be borne by you since it is import of service
Insurance premium income is business profit and included in article 7 in most of the DTAAs.
Service tax will have to be borne by you since it is import of service
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PRANAV BOTHRA
(Querist)
30 October 2012
Sir Please, Kindly elaborate your reply regarding DTAA & Service Tax
CA CS Amit S. Kedia
(Expert)
31 October 2012
You are availing insurance service from outside india which means it is import of service and you are required to pay ST under reverse charge.
And if there is DTAA between India and the Country of NR company and it is exempt as per that DTAA then you will have to get the certificate from the NR then only TDS will not be dedcuted.
And if there is DTAA between India and the Country of NR company and it is exempt as per that DTAA then you will have to get the certificate from the NR then only TDS will not be dedcuted.
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