Reimbursement of expenses to foreign holding co

Yes , based on the facts stated, TDS should be deducted.

Anuj

femaquery @ gmail.com

Re-imbursement of design fees? If you are referring to Fee for designing, then service tax on reverse charge basis will be applicable.  TDS will be as per DTAA or normal tax rate whichever is beneficial.  If the foreign beneficiary does not have PAN, then TDS will be @ 20%.

If the remittance is in the nature of re-imbursement, then there is no income element and section 195 will not be applicable; hence no TDS or service tax.However, you will need to have proper documentation to prove that there is no income element.

The golden rule for Reimbursement of Expenses" If the Indian company had paid the sum directly to foreign Company which is providing services ,then whether TDS was applicableor not"

Apply this rule and you shall get the answer.

Anuj

femaquery @ gmail.com