TDS on payment to Non-Resident for purchase of goods

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This discussion clarifies the tax implications when a resident purchases goods from a non-resident's business operating in India through an appointed agent. Tax is applicable on payments made to the agent, specifically under the provisions of Section 195(1) of the Income Tax Act, with TCS being relevant in such scenarios.

CA Ritu Chauhan

CA Ritu Chauhan (Querist)
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12 February 2021 If a non-resident wishes to run a business in India & for that he appoints an agent to look after day to day activities. Whether TDS will be applicable on payment towards purchase of goods from such agent of Non-resident?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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12 February 2021 Yes, TCS applicable on such payment from agent of non resident.

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Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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13 February 2021 The resident person purchasing goods from a business concern in India owned by a Non resident and manged by an Indian agent has to deduct income tax on the payment made to the agent
Inference :- Explanation 2 of section 195(1).

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