In 2017, China based technicians did technical jobs but for some reasons payment remains outstanding by Indian service receipients. To avoid tax audit issue, we picked up tax provision in March 2019 and paid withholding tax per DTAA. Like Form 67, we failed to issue Rax credit form to China party. They are unaware. Is there any legal threat to us, Indian importer of service.
Pl guide
Thanks
Jayanra Bandyopadhyay
23.9.21
From the query stated, I understand that:
1. The services were rendered in FY 2016-17
2. TDS was done in FY 2018-19
3. No certificate was issued to Chinese Company
Basis the above, my thoughts are:
1. Indian Company will be liable to pay interest for delay in deduction of tax. The exact period of delay would depend upon when the expense was booked and the actual deduction date
2. Since the certificate is not issued, there will be penalty of INR 100 per day per certificate levied
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