Tds on foreign services taken by an indian company abroad

Gist of opinion (Service provided by Non Resident company directly to Indian Customer)

·          G.I. Ltd.is the company registered in India as per Companies Act 1956 in India,

·         ABC Trans Logistics Ltd is the Company registered in India as per Company Act 1956 in India,

·         XYZ Trans Logistics Inc. USA is registered company as per applicable law in USA ( Foreign Company)

Fact of the Case:-

·          Ltd. approach to ABC Trans Logistics Ltd for Door to Door Freight Forwarding India to  USA for certain goods,

·         ABC Trans Logistics Ltd in India will arrange the custom clearance, Transportation, Freight forwarding till the destination of port and made separate bill to G.I. Ltd.to services rendered by him in India till the port of Destination,

·         XYZ Trans Logistics Inc USA will arrange the Custom Clearance, Transportation till Door at port of destination to buyer of G.I. Ltd. and directly billed the service charges to G.I. Ltd.in India.

Queries

·         Whether the G.I. Ltd. should deduct the TDS on Freight payment made in Foreign Currency directly to XYZ Trans Logistics Inc. USA u/s 195 of Income Tax Act India?

·          What will be the opinion in case ABC Trans & XYZ Trans are under holding & subsidiary relationship? Whether it will amount to Business connection and Permanent Establishment in India?

·         What will be the opinion in case ABC Trans & XYZ Trans are under holding & subsidiary relationship and ABC bill to G.I. Ltd. for complete service charges that is India service charges & abroad service charges?

Regards

CA.CS.Nagendra P.Gupta

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