Payment to Non resident

This query is : Resolved

Satendra (Querist)
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11 July 2011 Dear sir,
We have apointed an engineer at Belgium, who has no any establishment in India. We want to pay his professional fees, for professional work in India. Whether we are required to deduct TDS u/s.195 as per India Belgium DTAA.?

Sanjeeva Reddy

Sanjeeva Reddy (Expert)
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11 July 2011 First you have service tax liability also.
Import of services: In case the services are received from a non-resident and that NRI has no PE in india then the service receiver him self as a service provider has to pay service tax.

For TDS there will be a certificate provied by a CA (Form 15CB) for all foreign remittence. Refer to it and it will provide you the required data whether TDS applicable or not.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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11 July 2011 Yes you are required to deduct TDS U/s 195 as per the India Belgium DTAA.

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Arihanth Jain

Arihanth Jain (Expert)
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11 July 2011 Assuming that the engineer is an individual, if the services provided fall under list referred to in 'article 14 - Independent personal service' of the dtaa between India-Belgium, such income of the non-resident(NR) engineer shall be not be taxable if the NR does not have a fixed base or has not stayed for more than 183days in India.

However if the service provider is a company then tds shall be applicable both under dtaa and also as per I T Act. If tds is applicable also need to comply for PAN orelse tds shall be 20% u/s 206AA.