02 July 2009
One of my client imports raw material through opening foreign L/c. He makes payment after a usance period of 90 or 180 days. At the time of payment he makes payment of import bill i.e. cost of raw material + interest for usance period + confirmation charges. Whether and which part of payment is liable for tax deduction u/s 195 of the Income Tax Act.
02 July 2009
Interest and Confirmation charges are subject to tax and also you should check the rate of tax from DTAA and if not DTAA is there then section 195 can be followed.
CAclubindia
