Hi all
We are registered Garment manufacturing company, Which Exports Ready made garments.
we are receiving orders from foreign agency for which we pay Commission.
they do not have any branch in India,Is there ant necessory to deduct TDS
If so, how and section applicable. Please Advise
Regards
Pradeep Garg
agree with above sec 195 applicable
Agree wit U S Sharma. Sec 195 Applicable.
I think the income received by the foriegn agency is not accrued/arised/deemed to accrue or arised in India/ as you mentioned that the agnecy has no branch in India. So the Income is not taxable in India. Please refer section 9.
For attracting taxing statute, there has to be some activity through permanent establishment and, if income arises without any activity of permanent establishment, even under DTAA, taxation liability in respect of overseas services would not arise in India.
case laws CIT v. Hyundai Heavy Industries Co. Ltd. [2007] 161 Taxman 191/291 ITR 482 (SC).
So i think in your case no tax is required to be deducted
agree with rk singh
yes tds is deducted because income arrised/accrued in india
so please deduct the tds
agree with all....section 195 applies...
Dear All
In case of payment made to foreign agent ( No Branches In India) Commission, Section 195 NOT APPLICABLE , so TDS Not Applicable.
Regards:
TRILOCHAN
No need to deduct TDS on Foreign commission if he doesnt have office in India.
If the foreign Agent does only order procurement and does not indulge in market survey or other allied activities then there is no requirement to deduct TDS for the commission payment outside India.
Anuj
+91-9810106211
femaquery @ gmail.com
A foreign agent operates in his own country and receives his income outside India and hence such an agent is not liable to be taxed in India (Refer Toshoku Ltd 125 ITR 525 SC). Though circular number 786 is withdrawn, this decision which held that the foreign agent's commission is not taxable in India is relevant. Accordingly there would be no need to deduct tax at source.
Pls refer section 195 and DTA as well. You ll have to examine on country to country basis by checking DTA with respective counbtry. Also provisions of DTA will prevail over provisions of Income Tax Act to the extent they are benificial to the assesee.
Pls refer section 195 and DTA as well. You ll have to examine on country to country basis by checking DTA with respective counbtry. Also provisions of DTA will prevail over provisions of Income Tax Act to the extent they are benificial to the assesee.
CAclubindia
