10 February 2012
what will be the TDS implication on payment of commission to germany based non-resident company for hotel room booking in India ?????? is there any liability to deduct TDS???? in case of affirmative answer what will be the tds rate as per sec. 195 and as per DTAA with Germany???????
11 February 2012
Manoj Pl give background. Is this reimbursement? But you are mentioning commission for booking hotel and in India? Didn't got you. Whether travel agency?
11 February 2012
sir, its a german company which books the hotel room in india for tourist i.e the german people who comes india for tour and indian hotel pay 10% commission on bill amount to such german co.
11 February 2012
Manoj, under ITA same shall be taxable as business connection & source in India. Referring to DTAA, it feels that Article 7 r.w. 5, same can be covered as not taxable (assuming german co does not have PE in India). Hotel shall not be considered as PE in my view.
I doubt whether the said commission can taxable due to business connection or whether the same can be called as source in India.
You may refer the case 306 ITR 374 case of Golf in Dubai(Delhi High Court) in this regard.You may also refer case of Cushman Wakefield(AAR 757 of 2007)wherein the commission for selling property in India by a foreign company was held not taxable in india.
CAclubindia
