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Foreign remittance

15 January 2012

I have a client who has a contract with an individual lady (Mrs X) in Europe where Mrs.X would send tourists from different countries to India . Our client , then, provides the services to the tourists India.

My client has to pay $1000 monthly for this Inbound service to Mrs.X.

I have few questions :-

1.) Do we have to deduct TDS while making foreign remittance?

2.) If yes, what would be the rate and the category?

Mrs X does not have any PE in India.

Any early reply would be appreciated.Please treat it as urgent

Regards

Mayank Kapoor

09871009350

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5 Replies

praveen (Chartered Accountant) (6971 Points)
Replied 16 January 2012

Yes, it has to be deducted. at the rates specified in the act. i.e. as per Section 194C.

The provisions are contained in Section 195 of the act.

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Pawandeep Singh Ohsan (CA Acconts Officer) (33 Points)
Replied 16 January 2012

urs case is covered u/s 194c i.e, rates as per sec 194c. the provisions are covered u/s 195

pranab (manager) (25 Points)
Replied 16 January 2012

Dear Mr.Manyak

If there is no contract exists between your counter part in Europe , If you remitt the money to
Europe you need to get a certificate from your CA.

As the counterpart has not any Permanent Establishment in India ( PE ) status is nil , as per article 5, there is no need to deduct the TDS .

Regards

Pranab Kumar

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Mayank Kapoor (.) (159 Points)
Replied 16 January 2012

Yes, there is no PE in India. I will be giving the certificate (15 CA) also for every foreign remittance.

So Pranab, from your point of view, there is no TDS . Even i have similar views but i am a bit confused regarding the category. Does it falls under Personal Independent service , as many DTAA have written .

It does not qualify to be in the category of Technical service.