TDS on Foreign Remittance

This query is : Open

CA Ashok Shah (Querist)
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31 December 2008 One of my client a private ltd is freight Forwarding Agent who takes cargo of their client from India to be sent to the warehouse of Importer factory outside India. Necessary formalities are carryout at port of India by my client and other formalities and payments are made by the agent of respective country in its currency. After completion of this job, my client is required to remit the sum which his agent has spent plus agrred amount as brokerage/Commission or share of profit.
IS TDS require to be deducted on such remitance??? if yes provide the exact provisions of I T Act

CA Tilak Raj Sharma

CA Tilak Raj Sharma (Expert)
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01 January 2009 Agents operating outside India - Where non-resident agents operates outside india, no part of their income arises in India. Since the paymet is ususally reimbursed /remitted directly abroad it cannot be held to have been received by or on their behalf of the agent in India. So Such payments are not taxable in India and hence NO TDS - Circular No. 786 dated. Feb 2000.

CA Ashok Shah

CA Ashok Shah (Querist)
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07 January 2009 Mr Tilak Raj
Thanks for the circular but it says also regarding non allowability of expenditure.
so such remittance will not be allow as expenditure????????

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