Whether TDS u/s 195 required on foreign hosting / SaaS payments where GST RCM is paid

I seek guidance on applicability of TDS under Section 195 on certain foreign service payments.

Facts:

  • Indian business entity(Sole proprietor)

  • Payments made to non-resident service providers via credit card

  • Nature of services:

    • VPS hosting from a Europe company (no PE in India) (>30k RS per year)

    • Domain registration from Hostinger (Singapore) (<30k RS per year)

    • API-based services from US Provider (less than 30k RS per year)

Treated as import of services and GST paid under RCM

Issue for clarification:

  1. Does payment of GST under RCM automatically trigger TDS u/s 195?

  2. If the income is in the nature of business income of the non-resident and not taxable in India due to absence of PE under relevant DTAA, is TDS still required?

  3. TDS Rates

Replies (1)
  • GST RCM ≠ Income-tax TDS

  • Section 195 applies only if income is taxable in India

  • Business income without PE is not taxable

  • Your VPS, domain & API payments do NOT require TDS

  • Maintain documentation for audit safety

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