TDS on Air Freight Charges paid to NRI Company

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ankush94 (Querist)
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12 April 2010 A Clearing & Forwarding Co.in India pays USD 10,000 to an Air Freight Co. in Jamaica for moving its Client's spare parts between various overseas locations.(Charges recovered from client) India does not have DTAA with Jamaica. U/s 195 it appears that 40% TDS ought to be deducted while remitting these charges. It this a correct interpretation of the law?

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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12 April 2010 TDS TO BE DEDUCTED U/S195 @ 30.9%

ankush94

ankush94 (Querist)
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12 April 2010 Sir, 30.9% appears to be for Non Corporate Non Resident. In this case the Non Resident payee is a Corporate which seems to be 40%. Is that right?

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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12 April 2010 YES. AGREE WITH YOU. IF IT IS A FOREIGN COMPANY TDS 40%+SC+CESS AS APPLICABLE

ankush94

ankush94 (Querist)
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12 April 2010 Thanks. But if this same payment was to be made by the overseas branch of the Indian Co. to the Non Resident Corporate, would they have to deduct TDS? This does not sound right. Any thoughts on this?

taxindiaconnect

taxindiaconnect (Expert)
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04 May 2010 The entire income of the Air Fright company is not an income. In this situation one can apply to Income tax officer for income determination u/s 195(2) of the act.

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