My client purchased one machine from China. The following payments will be done.
1. Machine Selling Price 2. Salary Cost of Seller's Employee who will visit India to teach the operation of Machine. 3. Reimbursement of Traveling Fees.
In my opinion,
No TDS on purchase price. TDS on Salary Cost as technical fee Reimbursement of Travel Cost-Not Sure.
Please express your opinion and correct me if i am wrong.
Read a case in a book. If NR sells computer systems to Indian Clients and also provides Installation and Training to Clients' staff, then both will not be termed as Technical Fees as training & installation is incidental and linked to sale of computer. It is because of the reason of Sale of Computer.
04 May 2012
In relation to Travelling Expenses Reimbursement, amendment to Section 195 will make it compulsory to make an application to A O, who will determine, by general or special order, the proportionate of sum chargeable to tax. You may refer new sub-section (7) to Section 197.
05 May 2012
Amendment to section 195(7) is in context of composite contracts wherein the foreign parties charge less in thetraining fees and more in the cost of equipment. However the norms have to be notified .
Herein the foreign party needs to provide you with Tax Residency certificate"TRC" .
CAclubindia
