Tds for foreign companies

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

30 May 2012 My company is registered in UAE, carrying out the business of architectural drawings and we do not have any registration in India or any business interest in India. Recently we have prepared some Architectural drawings for a company in India and while making the payment, our client has deducted 20% tax towards service tax. In this regard, can you please clarify the following?

1) Is my Indian client is right in deducting TDS towards tax from my fees since the revenue earned by me out of a service carried out outside India and my company does not have any registration in India?
2) If yes, is the rate applied (20%) is correct or not?
3) If (1) & (2) above is yes, how can I get the refund from Taxation authorities, since we do not have a registration or business interest in India and hence my company is not an assessee in India?

Thanks

VIVEK BARANWAL

VIVEK BARANWAL (Expert)
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30 May 2012 1. Your indian client is correct
U/S 195 Rate is 30% but if UAE has DTAA agreement with india than rate of DTAA agreement will be applicable.

2. Rate is correct: In above case it seems your company is not having (indian)PAN than rate under section 206AA will be applicable.

3. You can ask for TDS certificate from your client and take rebate from UAE govt.