Withholding tax for payment to non resident

Under Section 9(1)(vii), the place of physical performance (Country E) is irrelevant because the services are utilized for a business in India.

Taxability under DTAA: Depends on the Treaty. If the India-Country D DTAA contains a "Make Available" clause, standard training usually does not satisfy this clause. Thus, in the absence of an Indian Permanent Establishment (PE), the income is not taxable in India. If the DTAA lacks a "make available" clause, it is taxable at the beneficial treaty rate or domestic rate (10% + surcharge/cess).

Withholding Tax (TDS): If the income is treaty-exempt, no TDS is required, provided supporting documents (TRC, Form 10F, No-PE declaration) are collected and Forms 15CA/15CB are executed. If it is taxable under the treaty, TDS must be deducted before making the outward remittance.

Sir

Many thanks for such detailed analysis. May I further ask please 

what is meant by 'Make available' clause in DTAA 

and

if treaty rate is applied should the rate be further increased by cess.

Regards,

The Make Available clause (common in India-OECD-pattern DTAAs) restricts taxability of technical services: income is taxable in the source country (India) only if the service makes specialised knowledge or technology available to the recipient in a way they can use independently afterward. Standard classroom or field training that imparts knowledge without transferring proprietary technology typically does NOT satisfy this clause. So under most India-OECD DTAAs, this training fee would be treaty-exempt from Indian withholding tax.

On cess: cess does NOT apply on treaty rates. The treaty rate is the ceiling on India tax, not a base on which cess is added. Cess (4%) applies only when domestic rates apply (e.g., Section 195 default rate). If the treaty rate of, say, 10% is applied, the payment out is 10%, full stop, no health and education cess on top.

Documentation required before making the remittance: Tax Residency Certificate (TRC) from Country D, Form 10F filed by the non-resident on the Income Tax portal, No-PE Declaration from the service provider, and Forms 15CA + 15CB filed by the Indian company. Missing any one of these makes the treaty protection unavailable at the time of remittance, even if the income would technically be exempt.

For the DTAA framework and cross-border payment obligations, this [NRI and DTAA guide](https://taxgarden.in/blog/nri-income-tax-india-residential-status-dtaa) covers treaty provisions and the documentation trail.