TDS Deduction for Exhibition in US

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ankit goyal (Querist)
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13 December 2024 Dear All,

We have to pay one US LLC for Exhibition which will be held in US. They raised invoice in US dollar of 20000 USD. So it will attract TDS deduction.
As per my understanding, section 9, TDS is not applicable.
Also confirm it TRC, PE declaration need to be collected. They have provide us W9 form.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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15 December 2024 Section 195 of the Income Tax Act pertains to payments to non-residents. However, under Section 9 of the Income Tax Act, income is deemed to accrue or arise in India if it is received in India or if the services are rendered in India. Since the exhibition is held in the US, and assuming the LLC does not have a Permanent Establishment (PE) in India, the income from this transaction generally would not be considered to accrue or arise in India. Therefore, TDS under Section 195 might not be applicable if the payment does not have an Indian source.
The TRC would help establish that the recipient is not liable to tax in India on this income if there is no Indian source or if exempt under the DTAA. However, since the payment is for services rendered outside India, the absence of a TRC does not directly impact TDS applicability in this scenario, but it is beneficial for the payer to ensure the correct tax treatment under international tax laws. If the US LLC has any operations or a fixed place of business in India related to this or other activities, a PE declaration might be necessary to assess if the income should be taxed in India. The W-9 form is not directly relevant to Indian TDS obligations but is used for US tax compliance purposes.