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No pe certificate and trc certificate

shibsankar (Asst. Manager - Accountants) (119 Points)

01 December 2016

Hi Everyone,

Our Director has been asked to attend GIA HBS Executive Program 2017 in Harvard Business School conducted by GEMOLOGICAL INSTITUTE OF AMERICA (HBS Executive Education).

They have raised an invoice in USD and they have their branch in Mumbai also.

I want to know , Do we need to pay TDS and Service tax on the same and NO PE certificate and TRC certificate required from them?

Thank you all.

Regards Shib

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2 Replies

Yash Kamlesh Gaglani (Chartered Accountant) (34 Points)
Replied 01 December 2016

Hi Shib,

If payment is to be made outside India, then Sec 9 of Income Tax Act, 1961 (the "Act") comes into play for TDS deduction.
Since, payment is to be made for program fees, is outside the purview of Sec 9 and no TDS needs to be deducted. Since sec 9 is not applicable no need to check for DTAA between India and US and no need for TRC and PE declaration.
There is also an other view, some consider it as income under sec 9(1) of IT Act, 1961 and DTAA between India and US applies to it. Then, Form 10F, TRC and no pe declaration is reqd and it will fall under Article 7 of DTAA between India and US and TDS @ 0% will be deducted.
Both the above cases are valid.
Wrt Sercive Tax, since it is an import of service, 100% service tax will be charged as per reverse charge mechanism by service reciever.
Regards,
CA Yash Gaglani.

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