We have appointed a foreign designer in England to develope fresh designes for our products. He will send his designes over email, fax and/or courier. We shall make payment towards his services via normal banking channels in foreign currency. HE DOESNOT HAVE A PE or OTHER BUSINESS CONNECTION IN INDIA.
My Queries:-
1.Whether such payments attract TDS U/S 195 ?
2. If yes, then at what rate and under which head of service? 3. Is the foreign designer supposed to apply for Indian PAN ? If yes, HOW ?
4. Is it liable to service tax under the reverse charge mechanism?
30 March 2010
Thank you Sir for your reply. Please note that w.e.f 01.04.2010 non quoting of PAN attracts penal TDS @ 20%. If the foreign designer doesnot have PAN then are we supposed to deduct TDS U/s 195 at 20% ?
CAclubindia
