28 October 2009
Dear Friends.. Kindly advice for the query stated below asap…
A resident company has given advertisement contract to nonresident company in US. The nonresident company shall put up the advertisement on its site. Is the company while making payment supposed to deduct TDS? If yes at what rate and under what Article of DTAA between US & India shall be applicable. The above shall not fall u/s 194 C as its for payments to resident… If reference of sec 9 is taken then dilemma is that it shall fall under 9(1)(vi) or 9(1)(vii)(b)…
in respect of ur querry, the payment of advertisment to non resident co will be covered under business profit i.e article 7 of the DTAA with US which needs to be read with article 5 of the DTAA i.e permanent establishment.
the above article read as in absence of PE in India NO tds is required to be deducted
CAclubindia
