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Tds

Aniruddha G Sathe (Senior manager) (29 Points)

18 February 2014

We have purchased windows license from Microsoft singapore. they have obtained PAN in india. they have raised invoice in INR and requested us to make payment to a party in india which may be their agent in India.

Whether section 195 is attracted or simply 194J is sifficient? pls let me know any other compliance also in case required?

Regards

Aniruddha Sathe

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8 Replies

CA. Kuldeep Singhi (Entrepreneur) (424 Points)
Replied 18 February 2014

I think if the billing address of supplier is located in India i.e. if Microsoft have mentioned the agent address on bill & u hv to pay in Indian Currency then tax deduction have to be made u/s 194J

CA S N Modi (Practice) (66 Points)
Replied 18 February 2014

Understnding of the case:

Your company has re purchased packaged software from an agent located in India who have purchased it from Singapore based person.

Opinion:

TDS will not be applied as per notification no. 21/2012 dated 13/06/2012 subject to fulillment of conditions as mentioned in the notification.

If any of the conditions are not fulfilled, then section 194J will be triggered.

Durga Prasad (Trainee) (392 Points)
Replied 19 February 2014

Sir Modi,

In the above case if they purchase directly from microsoft india, will it attract tds.??

Aniruddha G Sathe (Senior manager) (29 Points)
Replied 19 February 2014

Modi sir,

In this case, we have purchased from Microsoft directly. Billed by their singapore company. only while dischrging the liability they have requested us to make payment to their indian party located near Delhi.

microsoft has taken Indian PAN also.

In my opinion 195 will be attracted as in substance, we are purchsing windows from them directly. they have raised invoice on us in INR.

pls advice

CA S N Modi (Practice) (66 Points)
Replied 19 February 2014

Apply the same ratio keeping in mind following things:

Microsoft India is a private limited company registered in India under the name Microsoft Corporation (India) Pvt. Ltd. Compny is a separate legal person under the law.

It deals with sales and marketing operations for Microsoft's software products in India. Microsoft India sales the software upon importing from its parent company.

Naresh Dharia F.C.A. (PROPRIETOR) (426 Points)
Replied 19 February 2014

I afvise section 195 will apply. Take a look at DTAA & accordingly deduct tax... Request of the vendor to make the payment in India does not matter with the applcability of the provision Thx