TDS on Services rendered in Foreign Country

XYZ company is a manufacture of equipments and supplied the same to France and Sweden. The installation of the equipments is being done by a Foreign Company in France and Sweden. Foreign company has raised a Service Invoice on XYZ company (Indian Company) for Installation and commissioning of the equipments abroad.

Does XYZ Company (Indian Company) has to deduct TDS in these Service Invoices and remit the balance Payment. What rate of TDS we should deduct? will it be same as Prevailing TDS rate in our country?

Thanks  & regards

Kiran

Replies (2)

Hi Kiran,

TDS shall not be applicable as the service are rendered and used outside India.

 In my opinion , section 9(1)(vii) exclusions are:

1.business carried on outside india

2.earning from source outside india.

XYZ company is operating from India . Hence, TDS is applicable.

 

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