04 June 2012
There are 2 separate issues. Kindly opine. Thanks in Advance.
1. Royalty is payable to Foreign Co resident of Germany. What shall be the rate of TDS? Will there be any difference if the Company is not having PAN?
2. Will there be any requirement of TDS in case of payment of Sales Commission to an Agent residing and operating from outside India? What shall be the effect of cancellation of Circular No. 786 dated 02nd Feb, 2007 - specifically dealing with non-applicability of TDS in case of agents operating outside India?
05 June 2012
1. The rate shall be 10.51% if the foreign Co. has PAN otherwise 20%.
2. Ideally there should be no TDS if the services rendered by the foreign entity are purely in nature of sales commission agent. However there have been recent AAr rulings which have taxed the said payments(which in my view is incorrect).
CAclubindia
