Urgent regarding TDS on professional fees paid to NRI Co.

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This query is : Resolved

Deepak Kumar Suthar (Querist)

22 July 2011 We have received a bill from a UAE Based co of $51000 against architecture fees for service provided from UAE via internet. I just want to know that what is the rate of TDS. And There is any liability to pay service tax of my company as importer of service. and if yes then what is the rate of service tax.
According to me 10.56% is the rate of TDS and 10.3% is the rate of service tax. Plz Reply me fast i have to made this payment on monday .....
Deepak

Arihanth Jain

Arihanth Jain (Expert)

23 July 2011 I believe tds shall be 10% + cess i.e., 10.3%. Surcharge is applicable over RS 1 crore.

However referring to 'Article 14 - Independent personal services' of the DTAA between India-UAE the said payment may not be taxable in India at all.
(DTAA link https://law.incometaxindia.gov.in/DIT/File_opener.aspx?fn=https://law.incometaxindia.gov.in/Directtaxlaws/cbdt/dta/A1_UAE.htm)

Message likes : 1 times

CA. Anuj Gupta

CA. Anuj Gupta (Expert)

24 July 2011 If the foreign party does not have PAN then the rate should be 20%.

Anuj
+91-9810106211
femaquery@gmail.com

Arihanth Jain

Arihanth Jain (Expert)

24 July 2011 I too agree that a strict reading of Sec 206AA tells us to deduct tds 20% for non-availability of PAN.
However it is still arguable as to why an Assesse cant take the benefit of DTAA u/s 90(2)

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