Tds realted query

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Rupali12345 (Querist)
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08 November 2014 An Export Oriented Unit have an imported a lab equipment of foreign origin. It has developed some defects and there are no service Centre in India to rectify such defects. Hence, they have Re-exported the defective equipment to the Service Centre of the manufacturer at Germany for Repair and to return. Now the Service Centre in Germany has given an estimate of Euro 600 for PREVENTIVE MAINTENANCE AND CALIBRATION SERVICE on that equipment. Here are my doubts:
1. Should there be a deduction of TDS i.e. withhold tax' on such charges?
2. If so what is the percentage?
3. Is there any way to avoid it or reduce the TDS %?

Amol S Joglekar

Amol S Joglekar (Expert)
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08 November 2014 01. Since the machine is sent back to Germany and the repair work is carried out at Germany. So far as the charges for this repair work is concerned, it is earned outside India and hence not taxable in India and hence NO TDS be deducted.
02. This Preventive manitenance and Calibration service is something which is similar to Annual Maintenance Contract chrges????? If so, it is taxable in India and hence TDS be deducted.

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