Foreign remittance

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118 Points Posted on 15 January 2012

Hi 

I have a client who has a contract with an individual lady (Mrs X) in Europe where Mrs.X would send tourists from different countries to India . Our client , then, provides the services to the tourists India. 

My client has to pay $1000 monthly f​or this Inbound service to Mrs.X.

I have few questions :-

1.) Do we have to deduct TDS while making foreign remittance?

2.) If yes, what would be the rate and the category?

Mrs X does not have any PE in India.

 

Any early reply would be appreciated.Please treat it as urgent

Regards

Mayank Kapoor

09871009350

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On 15 January 2012 at 23:46 Report
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Chartered Accountant
5709 Points Posted on 16 January 2012

Yes, it has to be deducted. at the rates specified in the act. i.e. as per Section 194C.

The provisions are contained in Section 195 of the act.

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On 16 January 2012 at 10:07
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CA Acconts Officer
34 Points Posted on 16 January 2012
urs case is covered u/s 194c i.e, rates as per sec 194c. the provisions are covered u/s 195
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On 16 January 2012 at 10:43
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manager
24 Points Posted on 16 January 2012

Dear Mr.Manyak

If there is no contract exists between your counter part in Europe , If you remitt the money to
Europe you need to get a certificate from your CA.

As the counterpart has not any Permanent Establishment in India ( PE ) status is nil , as per article 5, there is no need to deduct the TDS .

Regards

Pranab Kumar

 

 

 

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On 16 January 2012 at 10:44
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118 Points Posted on 16 January 2012

Yes, there is no PE in India. I will be giving the certificate (15 CA) also for every foreign remittance. 

So Pranab, from your point of view, there is no TDS . Even i have similar views but i am a bit confused regarding the category. Does it falls under Personal Independent service , as many DTAA have written . 

It does not qualify to be in the category of Technical service.

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On 16 January 2012 at 12:03
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118 Points Posted on 17 January 2012

Will it make any difference if my client makes payment in the form of commission?

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On 17 January 2012 at 11:35

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