A Manufacturing Company is having an agreement with its raw material supplier in US to import material. as per terms of the agreement the supllier company (US) need to visit India on the exp of Indian company and help them in conducting some quality related test before supply. Whether the payment to foreign national as advance for expenses on travel of Foreign national should be treated as payment of Foreign technical consultancy or otherwise for the pupose of deduduction of tax at sourse /withholding tax?
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Tds on payment of travel exp to foreign national
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if the payment is purely in the nature of reimbursement or advance against which expenses actually incurred will be set off, then no TDS. However, is there is no nexus between the actual expense and the payments made, then TDS shall be applicable.
For eg, if you state in your agreement that actual expenses incurred shall be reimbursed, then no TDS. However if the agreement says, $ 100 per day, then TDS is applicable.
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