I am importing coffee from outside country. And i am remitting the money to foreign company for hedging of coffee. Is TDS duductible for remittance of money to foreign company for hedging coffee? If yes, then what will be the rate?
02 April 2015
The Indian payer making payments to overseas parties under a derivative transaction is generally liable to withhold tax at source. The procedure for obtaining this lower tax withholding certificate has been recently simplified. Now, based on a Chartered Accountant's certificate, the Indian payer can remit the payment after withholding tax at the lower rate applicable under the treaty or without withholding any tax, as the case may be. However, it has to submit an undertaking that it shall undertake to pay the shortfall in tax, interest or penalty, which are payable in accordance with the provisions of I-T Act.
The payment made to a financial services company based in Europe. The payment is made from Bangalore. Under which category we shall include this? Fee for technical Services? Please clarify me whether hedging can be treated as a technical service? Because this agency will act according to the instructions given by the Indian company. Please clarify. Thanks in advance.
CAclubindia
