TDS & Service Tax on Services of a Foreign Designers

This query is : Open

GIRISH SHARMA (Querist)
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30 March 2010 Dear Sirs,

We have appointed a foreign designer in England to develope fresh designes for our products. He will send his designes over email, fax and/or courier. We shall make payment towards his services via normal banking channels in foreign currency. HE DOESNOT HAVE A PE or OTHER BUSINESS CONNECTION IN INDIA.

My Queries:-

1.Whether such payments attract TDS U/S 195 ?

2. If yes, then at what rate and under which head of service?
3. Is the foreign designer supposed to apply for Indian PAN ? If yes, HOW ?

4. Is it liable to service tax under the reverse charge mechanism?

Request all learned to reply at the earliest.

Thanks/Best Regards
G. Sharma

Vishnu Saboo

Vishnu Saboo (Expert)
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30 March 2010 Yes
Proffestional services
No
Yes

GIRISH SHARMA

GIRISH SHARMA (Querist)
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30 March 2010 Thank you Sir for your reply. Please note that w.e.f 01.04.2010 non quoting of PAN attracts penal TDS @ 20%. If the foreign designer doesnot have PAN then are we supposed to deduct TDS U/s 195 at 20% ?

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