Tax on Foreign remittance for Designer

690 views 3 replies

Thakur

Proprietor

25 Points Posted on 28 December 2010

My client is Star rated Export house of Footwear’s. Footwear being a fashion product, requires trend & forecast of the European market, so that the company may launch their latest collection in fairs held in Europe.

Foreign designers located in Italy, Spain & Austria survey the European Market & send us the sketches for the upcoming trend.

These sketches are bare concept of the upcoming trend.

On the basis of these sketches the team of designers in India conceptualizes the sketches & finally makes a model of footwear.

Please advice, if the payment made to these non-resident designers is liable for withholding tax.

a. They do not have any establishment in India

b. They do market survey in Europe & then submit us sketches

c. We use these sketches to make footwear model to display in Europe fairs, procure export orders & then make export of these designs.

Replies (3)

sudarshan

745 Points Posted on 29 December 2010

pl. refer Fee for technical services / FIS (DTAA of relevant country).As per ITA , it is chargeable to tax and tax to be deducted.

Thakur

Proprietor

25 Points Posted on 01 January 2011

Originally posted by : sudarshan
	pl. refer Fee for technical services / FIS (DTAA of relevant country).As per ITA , it is chargeable to tax and tax to be deducted.

But designing is an artistic work & TDS is applicable on Technical services & not Artistic services.

The designers also give us bills stating that they have provided artistics sketches & servies to the organisation.

To say that we need to deduct TDS is very simple & is a precautionary approach, but we need to justify the department for reasons of non-deduction of TDS.

KIndly advise.