Sadhuanj (MBA) (68 Points)
25 October 2008Can any body clarify on this issue
We are manfacturers of Composite Insulators which are used at Electrification lines by Indian Railways and at Power Transmission Lines by Electricity Boards. WE have sent these Insulators to Sweden company for testing purpose and will be returned to the company. The company will pay the amount as testing charges in EURs by funds transfer to their bank account in sweden. Is there any TDS to be deducted and paid to the Income Tax Department. - S Anjaneyulu
Ramakrishna
(Financial Executive)
(438 Points)
Replied 27 October 2008
Dear Sadhuanj!
This payment is made for technical service rendered outside India by a non resident company. I feel, no TDS is attracted.
Do post your response!
Thank U!!
vishwanatham gandla
(employement)
(45 Points)
Replied 18 November 2008
Dear Mr Anjaneyulu,
The nature of transaction referred in your query is a technical service rendered by a non-resident company.It is therefore attracted TDS provisions as specified in Sec195. Pls deduct tax as specified in Double tax avoidance treaty( if agreement with such country is in place). Otherwise, your company shall have to face disallowance of such total payment made to Non-Resident. If the party agrees to it, deduct from his payment and issue tds certificate and by virtue of having DTA treaty, they can claim set off in their country.In case the non-resident doesnt agree for deduction from his payment, you need to gross-up and pay it to the govt, in which case it will be additional cash out flow to the extent of tds.
Vishwa
CAclubindia
