What is the rate of income tax on International co which doesn't have offices in India but supply goods to Indian PSU Co and provide engineering services to PSU Co. For example, A Sweden co have contract with Indian Oil Corp Ltd to supply and install Gas Turbine and will provide maintenance for next 2 year by Sweden engineer in India. I want to know on what % Indian Oil Deduct TDS on maintenance charges and is TDS applicable on Sale of Turbine.
05 May 2013
This contractual transaction come under the ambit of sec 195 of IT act. Amount Paid to Sweden Company for providing maintenance Services through Engineer is a "Fees for Technical Services" and Tds Rate is 10.30% (10% TDS+2%ED+1%HEC). However With Holding Tax Rate as per DTAA is 10% and need to deduct lower of two. Hence TDS will be 10% as per DTAA. TDS will not be deducted on Sale of Turbine.
CAclubindia
