A company located in Singapore is having a subsidiary office in India. Parent company (Singapore) deals in distribution & selling of medical Instrument via some dealers in India (India office is not involved in selling and all payments from customer/dealer end are directly made to Principal Company account in Singapore)
Section 206 AB will be applicable to Principal company in Singapore?
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APPLICABILITY OF SECTION 206AB TO FOREIGN COMPANIES
Replies (4)
Section 206AB is not applicable to a non-resident who does not have a Permanent Establishment in India. Hence, if Singapore Co does not have a Permanent Establishment in India, section 206AB is not attracted. Please note that the facts mentioned in the query is very brief and it is not possible to confirm whether Singapore Co has a Permanent Establishment or not. A detailed understanding of facts and consequent research would be required to determine whether Singapore Company has a Permanent Establishment in India or not.
Hi, thank you for responding. Permanent establishment is present in India. But financial & commercial activities are not done thru India office.
The section does not provide that the Permanent Establishment should be involved in the transaction. Hence, since Singapore Co has Permanent Establishment in India, the provision of section 206AB should get attracted. On a separate note, it is mandatory for a Foreign Company's Indian PE to file a tax return in India
Okay, thank you for the infornation. Much appreciated
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