Tds on payment to foreign entity

 

Plz help me on the issue:
 
The assessee is a Indian company manufacturing goods to be exported.
It is making payment to non-resident entity which is a {foreign company or otherwise} in Germany.
The above payment is made for certification fees which is charged by foreign entity. The company has to get its product certified from the German entity so that it could sale the products in Germany.
Whether TDS is applicable on certification fees?
At what rate and clause under Section 195 or DTAA?
what shud be the rate of surcharge applicable, if any.
The amount of payment is Rs. 200,000/- only.
Plz consider that 
1. if the foreign entity is a company
2. if foreign entity is not a company.
 
Waiting for ur Kind Reply
Replies (2)

Yes TDS is applicable

If there is no PE of German Company in India you can use DTAA rate . If there is PE then TDS rate is applicable.

If you are using DTAA rate then you will be governed by article 12 that is ' royalties & technical services' @ 10%. In that case you have to obtain tax ressidency Certificate from German Company.

 

In case you are not using DTAA then you have to deduct Tax @ 20% (tax rate for non availibity of PAN No) asuming german company is not having PAN No in India.  If german company is having pan no tax is to be deducted @ 10%

 

In all the cases you have to file form 15CA and obtain a certificate from in 15CB from Chartered accountant

the surcharge may not be applicable

in case, you need further details pl do contact me. 

 

 

 

Thanks Very Much for the Answer..

One more thing....

If we r considering section 115 or 195 ?

So it shud be understood that there is no difference between foreign company and a foreign entity other than foreign company for the purpose of TDS? is different sections are applicable to the two?

Plz elaborate under which code/section the tds is need to be deducted.

Regards

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