Deduction of tds on foreign agent

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deepak kumar (Querist)
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25 March 2015 Dear Expert
My company export through their Agent which is located in different country.I want to ask ,what is the TDS rate will imposed on him. And also tell me what is the documentation or which form is require for this. shall i need to file form 15CA /15CB OR not.

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Deepak Kumar

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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25 March 2015 1. Commission payments to non-resident agents for export by Indian firm does not represent income which is chargeable to tax under section 195 of the I.T Act 1961 when analyzed under the framework of provisions of the Indian I.T Act or under most Treaties. Hence, in our view, tax deduction at source is not required for said commission payments to non-resident agents for export by Indian company.
2. The CBDT circular 7 of 2009, which withdraws earlier CBDT circular(s) specific to the case, does not have an effect on the locus standi that the tax deduction at source is not required for commission payments to non-resident agents by the Indian company. In short, the position has not changed and status quo of Indian company payments can be maintained with the new circular.
3. However, as a matter of abundant caution and in order to avoid litigation, it would be advisable for the Indian company to either gross-up the tax OR deduct the tax (and have the non-resident agent either claim tax credit or file its return in India to claim refund).

You need to file form 15CA/15CB.

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