195 - withholding tax Treaty Vs Act

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A domestic company wants to remit money to UK based company towards services provided by UK company for Marking survey at UK and potential of its products there. My questions are:

(a) whether the payment will fall under "fee for technical services" (FTS)?

(b) In case of treaty it is mentioned that FTS is taxatble in both country. And taxable also in the source country.

(c) Does this mean that even if UK company has provided services out of india and does not have PE in india still this amount will be liable to be tax in India?

(d) rate of tax 10.3%, or 40.4 % (considering this as payment of other sum as the agreement is not approved.

Please advice.

thanks

Nilesh

Replies (1)
Originally posted by : nilesh


A domestic company wants to remit money to UK based company towards services provided by UK company for Marking survey at UK and potential of its products there. My questions are:

(a) whether the payment will fall under "fee for technical services" (FTS)?

Yes

(b) In case of treaty it is mentioned that FTS is taxatble in both country. And taxable also in the source country.
 

So that means it taxable in India.

(c) Does this mean that even if UK company has provided services out of india and does not have PE in india still this amount will be liable to be tax in India?

Yes as per sec. 9(1)(vii)


(d) rate of tax 10.3%, or 40.4 % (considering this as payment of other sum as the agreement is not approved.

10.3% if PAN is ther optherwise 20%

Please advice.

thanks

Nilesh


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