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Tds on software purchased

This query is : Resolved 
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(Querist)
27 November 2013 We imported from France a readymade shrink wrapped software DVD containing how to learn English Language for the benefit of our employees in our company. ITO is saying TDS should be deducted. We did not deduct tds since we purchased from a shop in Paris. Please advice, since it is not used by us for commercial purpose.
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Nitin Bhuta

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Nitin Bhuta (Expert)
27 November 2013 There is no withholding tax because what you have purchased is shrink wrapped software which is in the nature of product.

Transaction is also in the nature of business profits which leviable to tax in the source country according to the provisions of notified DTA agreements under relevant Article.

Since you have imported the same you must have paid custom duty on such imports I am assuming. Custom duty is normally applicable on import of products.

Apart from above there is no element of service involved to tax the same as Royalty or Fees for technical services or any other payments u/s 195 of the Income Tax Act 1961.
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