Foreign Taxation- Income deemed to accrue or arisen in India????

Punit Govil (CA FINAL(1st grp passed) CS FINAL M.COM)   (228 Points)

08 December 2019  

Hi All,

Please reply on below query.

In current scenarios, Export factoring companies are financing Indian exporters on the basis of Receivable Purchase agreement. Simply they discount the sale invoice (80% Value) of Indian exporters, pay money next day to Exporter  and on due date buyer of Indian Exporter pay directly to factoring Company. At last factoring company deduct their Interest/commission from the sale proceeds and return the remaining  20% value of invoice to Exporter.

Now my question is -

1- Is exporter liable to deduct TDS under section 195???

2- This income (for factoring company) will be deemed to accrue or arisen in India????

3- If factoring company says that It is covered under DTAA, then is it sufficient not to deduct TDS by Indian Exporter???

Please reply!