Income tax on international company

This query is : Resolved

AJAY VART KAUSHIK (Querist)
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03 May 2013 Hi Sir,

What is the rate of income tax on International co which doesn't have offices in India but supply goods to Indian PSU Co and provide engineering services to PSU Co. For example, A Sweden co have contract with Indian Oil Corp Ltd to supply and install Gas Turbine and will provide maintenance for next 2 year by Sweden engineer in India. I want to know on what % Indian Oil Deduct TDS on maintenance charges and is TDS applicable on Sale of Turbine.

Regards
Ajay Kaushik
9868940066

CMA Nishad Patkar

CMA Nishad Patkar (Expert)
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05 May 2013 This contractual transaction come under the ambit of sec 195 of IT act. Amount Paid to Sweden Company for providing maintenance Services through Engineer is a "Fees for Technical Services" and Tds Rate is 10.30% (10% TDS+2%ED+1%HEC). However With Holding Tax Rate as per DTAA is 10% and need to deduct lower of two. Hence TDS will be 10% as per DTAA. TDS will not be deducted on Sale of Turbine.

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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14 June 2013 The expert is right and I agree with him

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CA. Anuj Gupta

CA. Anuj Gupta (Expert)
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30 June 2013 The rate as per income tax act has Ben enhanced to 25% plus surcharge and education Cess.

Also the foreign company can be deemed to have a PE in India and appropriation of profits of Sweden company may be needed to be done in India.

Filing of returns in India and other tax compliance s may also be required if the Swedish Company is held to have an PE in India.

Anuj
femaquery@gmail.com