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Tds on payment made to non resident for web traffic

Jay Rajput (Director/Proprietor) (29 Points)

24 August 2011

Hello,

I am paying to a US resident for selling me Web traffic. Selling me visitors on CPM (clicks per milli) Basis. I Am selling them again to my local clients in Mumbai. In other words i am paying him to advertise my clients websites in US.

My Question is ?

1) am i applicable to service tax ? When i charge to my clients ?

2) Are payments made to US resident for selling me web traffic applicable to TDS ?

Any other information would be appreciable.

Thanks,

Jay.

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7 Replies

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 24 August 2011

service tax applicable on a) inport of services b) providing services under "business auxilary services"

input credit available of service tax paid on import services for set off against output service tax payable.

TDS is to be deducted u/s 195

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Jay Rajput (Director/Proprietor) (29 Points)
Replied 24 August 2011

Originally posted by : U S Sharma
	service tax applicable on a) inport of services b) providing services under "business auxilary services" input credit available of service tax paid on import services for set off against output service tax payable. TDS is to be deducted u/s 195

Commission paid to a non-resident agent for rendering services outside India, such income does not accrue or arise in India u/s 5 and such payments are not taxable in India and no tax is to be deducted u/s 195. (Circular no 786/07.02.2000)

I am sorry if i am not getting it, But My Payee is advertising my websites in US ? Hes rendering me Services in US ? If a NON resident provides me service in india It would be accounted as import of services ??

Also if i pay the TDS here will my Payee get it back when he submits the certificate in US ? India and US have the DTAA

https://www.irs.gov/businesses/international/article/0,,id=96739,00.html

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 24 August 2011

on one hand you asking for web traffic purchase, and other hand taling of commission agent ?

I assume you have agreement with overseas for bulk click and now you distribute the same in local clients at your ease, so the reply provisions of service tax for import applicable, and TDS also , under DTAA he may get eligible for credit, provided all the formalities are complied.

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Jay Rajput (Director/Proprietor) (29 Points)
Replied 24 August 2011

Originally posted by : U S Sharma
	on one hand you asking for web traffic purchase, and other hand taling of commission agent ? I assume you have agreement with overseas for bulk click and now you distribute the same in local clients at your ease, so the reply provisions of service tax for import applicable, and TDS also , under DTAA he may get eligible for credit, provided all the formalities are complied.

what would be the formalities of Applying for MY US payee's pan in india. What rate would be the TDS (with & without PAN ) & what % of service tax on input and output ?

Yea because hes getting my clients websites ad banners placed on different categories of websites in US, through many networks of advertising agencys in US. So he could either charge me through clicks or just working as a agent.