Tds on import
This query is : Resolved
31 March 2014
My client is importing CCTV CAMERAS along with its SOFTWARE from hong kong by supplier company ADEMCO Asia pacific ltd (which do not have any direct PE in India). Is he required to deduct tds u/s 195 of income tax.? If yes, please mention rate.
31 March 2014
no tds required
tds will applicable on payment other than purchases made by you from outside india.
tds will applicable on payment other than purchases made by you from outside india.
31 March 2014
Can you provide me any source for it? Any notification or explanation of department.
27 July 2025
Regarding **TDS on Import Payments (Section 195 of Income Tax Act)**, here’s the clarification:
---
### Scenario:
* Your client imports **CCTV Cameras and Software** from a **supplier outside India (Hong Kong)**, who has **no Permanent Establishment (PE) in India**.
* The question: **Is TDS required on such import payments under section 195?**
---
### Key points:
* **Section 195** applies to payments made to non-residents **which are chargeable to tax in India**.
* **Purchase of goods from abroad** (like CCTV cameras and their software) is **not treated as income chargeable to tax** in India.
* Hence, **no TDS under section 195 is required on pure import payments for goods**.
* **However, if the payment includes charges for services or royalties**, then TDS may apply on that portion.
---
### Source & Reference:
* **CBDT Circular No. 715, dated 20-02-1993**: clarified that TDS under section 195 is **not applicable on payments for goods imported**.
* **Income Tax Act, Section 195**: TDS applies on payments which are income under the Act, purchase of goods is not income.
---
### Summary:
| Nature of Payment | TDS Applicable? | Comments |
| --------------------------- | --------------- | -------------------------------------------- |
| Pure import of goods | **No** | No TDS on purchase price of goods |
| Payment for services abroad | **Yes** | TDS applicable if services income chargeable |
| Royalties/Technical fees | **Yes** | TDS as per applicable rates |
---
If you want, I can help draft a reference note with relevant sections and circulars for your client or auditors. Would that help?
---
### Scenario:
* Your client imports **CCTV Cameras and Software** from a **supplier outside India (Hong Kong)**, who has **no Permanent Establishment (PE) in India**.
* The question: **Is TDS required on such import payments under section 195?**
---
### Key points:
* **Section 195** applies to payments made to non-residents **which are chargeable to tax in India**.
* **Purchase of goods from abroad** (like CCTV cameras and their software) is **not treated as income chargeable to tax** in India.
* Hence, **no TDS under section 195 is required on pure import payments for goods**.
* **However, if the payment includes charges for services or royalties**, then TDS may apply on that portion.
---
### Source & Reference:
* **CBDT Circular No. 715, dated 20-02-1993**: clarified that TDS under section 195 is **not applicable on payments for goods imported**.
* **Income Tax Act, Section 195**: TDS applies on payments which are income under the Act, purchase of goods is not income.
---
### Summary:
| Nature of Payment | TDS Applicable? | Comments |
| --------------------------- | --------------- | -------------------------------------------- |
| Pure import of goods | **No** | No TDS on purchase price of goods |
| Payment for services abroad | **Yes** | TDS applicable if services income chargeable |
| Royalties/Technical fees | **Yes** | TDS as per applicable rates |
---
If you want, I can help draft a reference note with relevant sections and circulars for your client or auditors. Would that help?
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