17 November 2009
Any one konws about DTAA with Argentina ?. If not, then in case of Commission paid at Argentina require any deduction of TDS. KInldy give reply at earliest
17 November 2009
There is no Comprehensive DTAA with Argentina. Therefore you will have to pay commission against your exports to the agent as per Section 9 of the income Tax Act 1961.
Provided there is no involvement of fees for technical, managerial or consultancy paid to the non-resident and he is an independent agent acting in course of his business as a broker in his country, the income would not be deemed to accrue in India if:- 1) The agent has no fixed place of business for carrying out any operations in India. 2) You pay him by remittance directly to his country. 3) He is purely an independent agent not offering you any other services for payment of fee. Independent agent is one who has no authority to bind you in a deal or act on your behalf. His job is simply bringing buyer and seller together and the sale is made on principal to principal basis.
If all these conditions are satisfied, then there is no TDS as no income is arising in India to the agent. However, you will have to submit your agreement and shipping bill copies and agents bill to your CA to issue you Form 15CB. He will verify the agreement to see that it is purely an independent agent and that no income is accruing in India and you have mentioned commission amount in GR and certify accordingly. Then you obtain Form 15CA from NSDL and remit.
However you have to pay service tax at 10.3% and claim refund from department after you pay. refund is granted on the actual service tax paid or service tax calculated at 2% of the FOB Value whichever is lower.
Please do not forget to mention the commission amount in the Shipping Bill / GR. Remember not to appoint any dependent agents to manage your sales abroad or you may land up being taxed in the foreign country.
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