CIRCULAR NO 723 DT 19.09.1995

This query is : Resolved

Rajesh Bajaj (Querist)
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15 November 2007 DEAR SIR

ON THE BASIS OF ABOVE CIRCULAR ONE PARTY GIVEN US A CERTIFICATE FOR DEDUCTION OF TAX AT SOURCE ARE NOT APPLICABLE TO FOREIGN SHIPPING COMPANIES OR THEIR AGENT IN RESPECT OF PAYMENTS MADE ON ACCOUNT OF CARRIAGE OF GOODS IN INTERNATIONAL TRAFFIC

IS IT CORRECT ?
WE HAVE TO DEDUCT TDS OR NOT FOR THE FINANCIAL YEAR 2007-2008 PLEASE TELL US

WHAT IS THE STATUS OF THIS CIRCULAR IN FY 07-08 MEANS SOME CHANGES MADE IN THIS CIRCULAR OR NOT

MY MAIL ID IS rajesh_bajaj1234@rediffmail.com

Thanks in advance
Rajesh

S.RAVICHANDRAN

S.RAVICHANDRAN (Expert)
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15 November 2007 To the best of my knowledge, there is no change in the subject matter of the circular No.723 dt.19.09.1995, and the TDS is not required to be made for payments made to foreign shipping companies or their agents.

KAAPIL

KAAPIL (Expert)
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15 November 2007 Thanks.

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Ravikumar.G

Ravikumar.G (Expert)
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16 November 2007 There is no further change in circular no 723

Amarjeet Singh

Amarjeet Singh (Expert)
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16 November 2007 Circular : No. 723, dated 19-9-1995.
TDS provisions will not apply - The provisions of section 172 are to apply, notwithstanding anything contained in other provisions of the Act. Therefore, in such cases, the provisions of sections 194C and 195 relating to deduction at source are not applicable. The recovery of tax is to be regulated, for a voyage undertaken from any port in India by a ship, under the provisions of section 172.
There would be cases where payments are made to shipping agents of non-resident ship-owners or charterers for carriage of passengers, etc., shipped at a port in India. Since, the agent acts on behalf of the non-resident ship-owner or charterer, he steps into the shoes of the principal. Accordingly, provisions of section 172 shall apply and those of sections 194C and 195 will not apply.
THE STATUS OF THIS CIRCULAR IN FY 07-08 is same. No CHANGES MADE IN THIS CIRCULAR .As section 172 still govern method of recovery of tax from foreign companies.Therefore you are not required to deduct the TDS.