Tds on foreign payment

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

30 November 2012 one co is making payment to a foreign co in uk for purchase of top up ( talk time ) in foreign currency. That co has no permanent establishment in india. My question is that whether tds to be deducted on such payments or not. If yes at what rate ?

Thanks in advance.

Sunny Sonwal

Sunny Sonwal (Expert)
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30 November 2012 Yes, you have to deduct TDS on any type of foreign payment. In your case payment will be covered under section 195(i) @ 40% if the payment to a company in other case @ 30%.

In this regard you have to take a certificate from a CA in Form-15CB and fill 15CA alongwith form A-2 and submit to the bank for remit that amount to that foreign company.

CA. Anuj Gupta

CA. Anuj Gupta (Expert)
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30 November 2012 I beg to differ from replies of Sunny.

TDS is NOT to be deducted on all kinds of foreign payments, that has been made very clear by Supreme Court judgement in "GE Technology".

Here based on the limited facts given by the author I feel that TDS should not be deducted by the Indian Entity provided Tax Residency Certificate(TRC) from UK Govt. and NO PE Certificate from Foreign Company.

Anuj
femaquery@gmail.com

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