tds on commission paid to foreign agent

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

04 January 2010 WE ARE MANUFACTURER & EXPORTED. WE GOT AN ORDER THROUGH A FOREIGN AGENT BASE IN EUROPE ON COOMSSION.

BUYER IS IN EUROPE & COMMISSION AGENT IS IN EUROPE.

NOW QUESTION ARISE THAT-

IS IT SUBJECT TO TDS ?

IF YES HOW MUCH?

HOW MUCH TDS IS TO BE DEDUCT ON PAYMENT OF COMMISSION. AND HOW TO DEPOSIT BECASUE THEIR PAN IS EUROPE BASED. WHAT ARE THE REQUIREMENT TO DEPOSIT TDS

SUBHASH SAXENA

Bimal Thacker

Bimal Thacker (Expert)

04 January 2010 No, You are not required to deduct any TDS on commission paid to agent in Europe for service received in Europe. In your case agent operates outside the country, no part of his income arise in India. Further payment is usually remitted directly abroad, it cannot be held to have been received by or on behalf of the agent in India. Such payent are therefore not taxable in India.
Kindly alro refer the Circular no. 786 dt. 07.02.2000
the above view is also supported by CIT v. George Williamson (Assam) Ltd. (2008) 305 ITR (AT)422 (Gauhati)

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