TDS on payment to Foreign Government

Yes it does attract TDS under section 195

Hi Nicky,

Australian Trade commission is a part of Australian Embassy (as it is a government), payments made to government does not attract TDS... is not it....???

Sec 195 is applicable for Non-Resident, where as ATC is a resident since it is registered in India & has a PAN also.

Let me know your openion....

Hi Ayesha,

TDS will be attracted as ATC is not related to Indian Government. Now it can be covered under two section depending upon its residential status. IF the residential status of ATC is non resident then 195 will be attracted but if it is resident then depending upon the nature either in 194C or 194J.

Ayesha,

Pretty interesting what you said and I agree with Shudhanshu Agarwal on this matter too

But I have my own doubts over service tax issue arising out of sponsorship services and in the given case it attracts TDS on a reverse charge basis

Hi Nicky,

I want to know what is the meaning of reverse charge basis.

Service receiver has to pay service tax

Hi Ayesha,

I totally agree with agarwal view. Also just because ATC is having PAN does not presume that it is a resident. Please get all the details correctly before going ahead with the payment. Just a word of caution, Especially after the karnataka high court judgement in samsung case, even if the payment made to non-resident are not liable to tax in india it has to either make an application u/s 195(2) or get a CA certificate.

Regards

Kanti Jain

It is simple to know the residential status of the it. If this payment is made to the Australian Embassy which is in India then its residential status will be resident as per Section 6. But if payment is made to ATC which is not in India then it will be Non resident.

Guys, i think Ayesha has a point here. i was doing a similar research and found that any paymnt made to embassy or high commission of a foreign country in India is not liable to TDS as it is not governed by the provisions of the Income-tax Act, 1961.