13 March 2009
Are provisions of Sec. 195 of IT Act, 1961 applicable?
eg: There is JV between two companies Indian & Foreign. Suppose Foreign Co. provides some employees to JV and those emplyoees while on duty incurr some expenses on behalf of JV which calls for reimbursement. Now Foreign Co. reimburses those expenses and raises debit note of those expenses on JV. JV for whom actual expenses are incurred reimburses those expenses to Foreign Co. To make it convinient Foreign Co. plays intermediater role.
Is payment towards debit note i.e. reimbursing of Expenses to Foreign Company falls under provisions of Sec. 195??
Please reply to matter its urgent.
Citation of Case laws in favour of not application of Sec. 195 will highly be appreciated.
17 March 2009
It depends upon the residence status of Joint venture company and whether India has any DTAA treaty with that country. Then it has to to be examined, where this income is taxable. If this income is taxable in India, TDS is required to be deducted in India.
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