Foreign remittance

This query is : Resolved

ruturaj (Querist)
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14 April 2012 With reference to the above subject, we would like to know whether we should with hold income tax (i.e. TDS) in the below mentioned cross border transaction:
Facts of the Case:
 Assessee: ABC Limited (“Indian Company” incorporated in India and a tax resident of India) is a subsidiary of the below mentioned Dubai company.
 Service Provider: XYZ Company, Dubai (“Parent Company (Dubai)”)
The assessee is in the business of rendering service of certification (panama etc) to crew members of clients based and situated in India. The Indian Company then forwards the documents via courier for certification purpose to the parent company (Dubai), who is in the membership panel of the Statutory Issuing Authority. After completion of service, the certificates are being sent back to the Indian Company and bill is levied to the clients in India.
The parent company raises the invoice for the services provided to the Indian Company.
Now, we want to remit the amount to the parent company for which we require your valuable opinion for withholding of tax on the transaction or not.

If the reply is affirmative, then at what rate the tax has to be deducted by the Indian Company u/s 195 and what is procedure to be followed by the parent company to claim the refund of TDS deducted by the Indian Company and whether foreign company is taxable in India.

Kindly look in to the matter and provide us your valuable opinion, so that the remittance can be done at the earliest. For any other clarification and documents, do let us know.

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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16 April 2012 To remit any money you need to take permission from RBI and also a certificate from any CA for remittance. Withholding tax is applicable