Tds on paypal commission

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

18 August 2013 There is private Ltd. company providing IT Services outside India. Fee for these export services is received through an agent PAYPAL. PAYPAL makes the net payment to client after deducting his own commission. For example, if USD200 are received by PAYPAL, then PAYPAL actually remits only USD190 (after deducting 5% commission)into client's account.
My question is that whether the Client is liable to deduct TDS on this commission. If yes, what would be the operating model for these transaction.

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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18 August 2013 There can be two views of this
1) It is deemed export of services and no TDS is to be deducted on 190
2) The second view is this that since the final payment is made by the indian company based in India it is a payment against contract in India and in this case yes TDS is deductible.

Querist : Anonymous

Querist : Anonymous (Querist)

24 August 2013 Thanks for reply. However, I am still not very sure about the answer. Can you please elaborate & suggest the preferable option.

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