12 June 2010
MY CLIENT IS A PRIVATE LIMITED COMPANY. MY CLIENT HAS ENTERED INTO AN AGREEMENT WITH A CHINESE COMPANY FOR RENDERING TECHNICAL KNOWHOW IN MY CLIENT'S COMPANY BASED IN INDIA. THE EMPLOYEE OF CHINESE COMPANY WILL COME TO INDIA AND PROVIDE TECHNICAL KNOW HOW TO MY CLIENT RELATING TO PRODUCTION OF FINISHED GOODS.
WHETHER MY CLIENT IS LIABLE TO DEDUCT TDS FROM THE PAYMENT TO THE CHINESE COMPANY. IF, YES AT WHICH RATE, AND WHETHER THE CHINESE COMPANY CAN GET BENEFIT OF SUCH TDS AT THE TIME OF RETURN FILING IN CHINA.
15 June 2010
There is a DTAA between India and China. As per the facts given by you the services will be covered under FTS. The tax rate will be 10%. But again it will depend on the perid of stay in India which, in case, exceeds 182 days then there is a PE exposure.
CAclubindia
