27 July 2025
For payment to a foreign vendor (like your China vendor) for services such as fabrication of a stall in a fair held **outside India**, the TDS provisions depend on whether the income is deemed to accrue or arise in India.
### Key points:
* If the **services are rendered completely outside India** (fabrication of stall in China for a fair held in China), then **no income arises in India**, so **no TDS is applicable** under section 195. * If the payment is for services rendered **outside India**, **no TDS deduction** is required.
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### However, if the payment is for any services that are considered to have a **business connection or source in India**, then TDS under **Section 195** may be applicable.
### TDS Rate:
* In case TDS is applicable, the rate would depend on the India-China Double Taxation Avoidance Agreement (DTAA). * Typically, under DTAA, the rate is generally around **10%** but can vary based on the specific nature of services.
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### Summary for your case:
* Since fabrication of stall is done in China (services outside India), **no TDS is required to be deducted**. * If you want to be extra cautious, get a **tax residency certificate** from the vendor and documentation showing services were performed outside India.
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If you want, I can help you draft a formal note or a checklist of documents you should get to support this treatment. Would you like that?
CAclubindia
