Import from 100% subsidiary
This query is : Resolved
01 November 2012
fact- an indian unlisted ltd.company has 100% subsidiary in UK.
Indian parent imports goods from this UK subsidiary as a normal import purchase.
Is tds u/s.195 to be deducted while making import payment to this UK subsidiary for goods imported? this UK subsidiary has no office or no place in india.
My view is that no tds need to be deducted and we CAs can give 15cb. am i correct? eagerly awaiting reply,
from mr.kunjan shah, www.nsc.in , 9820750784
Indian parent imports goods from this UK subsidiary as a normal import purchase.
Is tds u/s.195 to be deducted while making import payment to this UK subsidiary for goods imported? this UK subsidiary has no office or no place in india.
My view is that no tds need to be deducted and we CAs can give 15cb. am i correct? eagerly awaiting reply,
from mr.kunjan shah, www.nsc.in , 9820750784
01 November 2012
No TDS is required to be done. However, being associated enterprises, "transfer pricing" will come into play.
Message likes :
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01 November 2012
strangely, yesterday income tax nonresident section gave a notice to client asking why no tds u/s.195 was deducted on above transcation that department notice also enclosed our 15cb normal purchase nil tds certificate !.
how tds is attracted when own parent has purchased !
regards,mr.shah, nsc.in
how tds is attracted when own parent has purchased !
regards,mr.shah, nsc.in
02 November 2012
Give the ANSWER imediately to dept.
02 November 2012
Kunjan,
Problem is that International Tax Department doesn't understand the transactions in totality.
If the transactions are undertaken on PRINCIPAL to PRINCIPAL basis between the two Companies and the UK Company is not rendering any other service to the Indian company then there should be no requirement to deduct TDS under sec. 195. I am saying this based on presumption that UK subsidiary shall not have any PE in India.
However under transfer pricing regulations the value of purchase should be at "Arms Length price".
Anuj
femaquery@gmail.com
Problem is that International Tax Department doesn't understand the transactions in totality.
If the transactions are undertaken on PRINCIPAL to PRINCIPAL basis between the two Companies and the UK Company is not rendering any other service to the Indian company then there should be no requirement to deduct TDS under sec. 195. I am saying this based on presumption that UK subsidiary shall not have any PE in India.
However under transfer pricing regulations the value of purchase should be at "Arms Length price".
Anuj
femaquery@gmail.com
Message likes :
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02 November 2012
thank you sir,
Yes :-
1.this UK Subsdiary of Indian parent has no PE in India
2. it provides no other service or goods to the indian parent company except this sale made to Indian parent company.
3. transfer pricing applies and are always successfully completed for these transactions
Yet, Department giving notice for indian parent to deduct tds u/s.195 for purchase from own UK subsidiary !!
I pray department understands our viewpoint!
Thank you mr.amol and mr.gupta
Will keep both you posted,
regards, mr.kunjan shah
www.nsc.in ,
Yes :-
1.this UK Subsdiary of Indian parent has no PE in India
2. it provides no other service or goods to the indian parent company except this sale made to Indian parent company.
3. transfer pricing applies and are always successfully completed for these transactions
Yet, Department giving notice for indian parent to deduct tds u/s.195 for purchase from own UK subsidiary !!
I pray department understands our viewpoint!
Thank you mr.amol and mr.gupta
Will keep both you posted,
regards, mr.kunjan shah
www.nsc.in ,
03 November 2012
Thank you Kunjan. Department must accept your views. Ther is no second thought for this. sec 195 can not be used by the department as an UNRULY horse. Best of luck. Please let me know for any further help.
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