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TDS to be deducted in case of Foreign Remittances for Import

Rajesh (Partner) (26 Points)

05 April 2010

Whether CA certificate is required to be submitted to the bank for remittances under form A1 (payment for goods)

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13 Replies

Nicky (Chartered Accountant) (245 Points)
Replied 05 April 2010

a) When it is pure sale of goods by the foreign party then no TDS is liable to be deducted

b) But however u ll need a certificate from a CA in 15CB from a CA stating that the transaction is not liable to tax in India and Form 15CA would have to be electronically uploaded on income tax site...

CA will have to take due precaution about existence of Permanent establishment.

2 Like

NARINDER SINGH (MANAGER-FINANCE & TAXATION) (23 Points)
Replied 06 April 2010

There is big confussion on this issue whether the import payment would require the certificate of CA and filing of declaration in 15 CA.

Sec 195 relates to TDS on income to the non resident, if recipt is not income itself then there is no question of TDS

Please understand whether payment made for indigenious material supplier would be liable for TDS its not,

then how can it be for import payment for goods. Confusion has arise due to the mention in form itself that whether payment relates to Machinery, equipment etc to non resident having permanent establishment in India.

From my understanding payment for import is not liable for TDS u/s 195. Hence no CA certificate is required neither the declaration is required in Form 15CB.

I am attaching the Tribunal decision and the Form 15CA & 15 CB if you read both harmoniously you would understand the intention of the Dept and requirement in this regards.

https://www.taxguru.in/income-tax-case-laws/the-obligation-to-deduct-the-tds-us-195-1-arises-only-when-the-payment-is-chargeable-to-tax.html#ixzz0jAwUdU1a

I had checked with big professional managed they are not obtaining CA certificate for import payment nether the banker (as authorised dealer)are asking for this before making any remintance to non-resident.

Hope this would clarify.

Regards

Narinder Singh (CA & CWA)

Attached File : 59 tds related itat decision clarification on form 15ca 15 cb.doc downloaded: 884 times

Nicky (Chartered Accountant) (245 Points)
Replied 06 April 2010

Dear Narinder,

With all due respect the Tribunal decison u have attached is nothing but an extension of a Landmark case Transmission Copropration of India, the same has been referred to also before passing the stated judgement.

Now for incase of imports whether 15CA and CB is required or not needs to be seen in this prespective:

a) Section 195(1): Makes it mandatory to deduct tax at rates in force whenever there is a payment to a non resident of foriegn company (I have highlighted the in the decision u just attached the same meaning)

b) Once Section 195(1) becomes appliacable you autmotically have to comply to Section 195(6) i.e. 15CA & CB

c) For Banks not asking for the stated decleration, both are at a risk to be treated as Agents of the said Non - Resident.

HERE, one more point is worth mentioning if the said transaction sale is a pure sale no need to deduct TDS but at the same time compliance to 15CA & CB is required at NIL rate of TAX.

Attached File : 54 59 tds related itat decision clarification on form 15ca 15 cb 1.doc downloaded: 1130 times

Hemank Deshpande (Proprietor) (32 Points)
Replied 06 April 2010

Dear Friends

Can you enlighten on two issues :

1. Is the Form 15CA/CB to be uploaded by assessee or AD/Banker?

2. In case of shipping companies based abroad do they have to take PAN mandatorily?

3. The assessee do not deduct tax on Remittances for subscripttions and services like satellite communications, but the banker/AD has insisted on certificate in 15CA/CB is the process correct?

4. As a Certifying CA should the form be uploaded by the CA?

Nicky (Chartered Accountant) (245 Points)
Replied 06 April 2010

1) Either the assessee or the chartered accountant but normally the CA

2) I am not sure

3) The process is correct, a banker/AD need not know Income Tax. Therefore, there is a need

4) CA only certiffies 15CB and not CA, he may uplaod as a matter of procedure.

P.Srinivas Rao (Manager Commercial) (37 Points)
Replied 14 May 2010

Can any body help me is it compulsory to deduct TDS on foreign remitances on import purchases.

Thanks

Srinivas. P.

CA Satish Dindokar (CA ) (38 Points)
Replied 16 August 2012

I have made huge number of import payments.

No TDS is applicable if it is just a pure purchase and no service is involved in it.

you have to just submit only Form A1 + simple declaration ( both will be available to you from banker )

Pravat Ranjan (CA Job) (21 Points)
Replied 21 February 2014

Dear Friends,

My question is whether foreign remittace for purchase of goods out side india is liable to TAX in India.

If your answer is TDS not deductibe then I am agree. But now the question is, non resident doesnot have PE in india. and if we remit without deducting tax then the non resident generate income from india without any tax. as per income tax provision the income which are accures in India is taxable in india for all including non resident. Again in 15CB(new format) in point no 8 whether could we show it as the income is now liable to tax in india. kindly give your valuable comments.

Thank you.

Lingesh K. (.) (72 Points)
Replied 16 December 2014

Dear Sir,

1. What is the Procedure for Subscripttion Fees (Nature of Foreign Remittance) Paid to USA Foreign Company.

2. TDS Deductable on $775 USD, If Deductable then Kindly provide Section & Rate.

3. After Uploading Form 15CA Part-1 What is the Next Procedure.

4. Form 15CB CA Certificate Required for above Procedure.

Sir, Kindly provide the procedure & details Very Urgently.

Thanks & Regards,

Lingesh K.

E-Mail ID - lingesh_786 @ yahoo.co.in

madhu (proprietor) (21 Points)
Replied 16 February 2015

A Company is importing Plant & Machinery for the purpose of testing its products for quality control from USA. The Company in USA is not having Permanent Establishment in India. I have obtained a certificate from USA to this extent. Filing form 15CA and 15CB is essential . But my doubt is whether this transaction is liable for deduction of TDS.

I personally feel that this transaction does not require deduction of TDS. Let me know.

dinesh (Sr Executive Finanace) (21 Points)
Replied 23 June 2015

Dear Sir,

is TDS is required on remiitance of foreign paymnet , its a Debit Note raised by parent company even their is no supporing document ony debit note is there.

in this case can we decut the TDS.

Deepak Tapse (Accounts Manager - Taxation) (1771 Points)
Replied 23 June 2015

Subscripttion Fees paid for which purpose. If it is for magazine then no TDS

DK GUPTA (2 Points)
Replied 14 November 2018

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