Tds u/s 195
This query is : Resolved
23 August 2011
Dear All
The facts are as follows:
B Ltd (India) is a subsidiary of A Ltd ( Japan ). A Ltd Japan recovers from B Ltd the cost of usage server.
In other words, the parent company in Japan incurrs cost of server and allocate the cost to its subsidiary company and
accordingly recovers the same from the Subsidiary company in India.
Query:
Is the Indian Subsidiary is required to deduct any TDS on payment made to Parent company for usage of Server located in Japan.
Please let me know any other information required to solve the query.
The facts are as follows:
B Ltd (India) is a subsidiary of A Ltd ( Japan ). A Ltd Japan recovers from B Ltd the cost of usage server.
In other words, the parent company in Japan incurrs cost of server and allocate the cost to its subsidiary company and
accordingly recovers the same from the Subsidiary company in India.
Query:
Is the Indian Subsidiary is required to deduct any TDS on payment made to Parent company for usage of Server located in Japan.
Please let me know any other information required to solve the query.
24 August 2011
If the cost is pure reimbursement for expense incurred on Indian subsidiary's behalf, then TDS is not required.
However, from the fact of the case it appears that the holding company is charging on an adhoc basis. This could be a kind of Royalty. Hence, WHT u/s 195 would be mandatory in addition to Serivce tax u/s 66 A of Fin Act.
However, from the fact of the case it appears that the holding company is charging on an adhoc basis. This could be a kind of Royalty. Hence, WHT u/s 195 would be mandatory in addition to Serivce tax u/s 66 A of Fin Act.
25 August 2011
I agree that it shall be better to deduct TDS as that may be classified as Equipment Royalty.
However :-
Who controls the server?
Whether Parent Company can use the server as per its terms or thats a standard facility availed by Parent Co. from Foreign Company?
These questions can change the face of whole situation.
Anuj
+91+9810106211
femaquery@gmail.com
However :-
Who controls the server?
Whether Parent Company can use the server as per its terms or thats a standard facility availed by Parent Co. from Foreign Company?
These questions can change the face of whole situation.
Anuj
+91+9810106211
femaquery@gmail.com
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Is this income indian or foreign income?
- ITC temporary reversal and reclaim
- GST on export of services and Input Credit
- RCM applicability on Rent Paid by Registered Person to Unregistered Landlord for Residental Building
- Inventory of finished goods
- Applicable TDS rate for sale of property in Nov 2024
- Sale of property furniture sale
- Can we claim ITC of Feb-2024 in the month of November-2024 which was not claimed by oversight
- REGARDING 25 AS DATE OF PAYMENT AND DATE OF BOOKING
- Tds on building rent monthly
- Regarding Waiver of Interest levied u/s 50 of PGST/CGST Act
- LAST YEAR 2022-23 ITC IN NEXT YEAR 2023-24 REPORITNG IN GSTR-9
- MIS MATCH OF INVOICE NUMBER
- IGST Credit-Show cause notice issued-confusion
- Issue of gst e invoice
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
- 133(6) DIN INVALID format error - ->WHERE TO REPLY 133(6) notice?
- Query for dubts
- Regarding einvoice taken on nil rated sales
Trending Online Classes
CAclubindia
