Ayesha Banu A (.) (105 Points)
19 May 2010Hi Friends,
Can any one suggest me for the following:
Rs.1,06,000 is paid to Australian Trade Commission by Lioson Office in India towards sponsership fee for attending conference.
Does it attract TDS provisions...??? If yes, under which section....???
Please it is urgent..!!!
Thanks in advance.
Nicky
(Chartered Accountant)
(245 Points)
Replied 19 May 2010
Yes it does attract TDS under section 195
Ayesha Banu A
(.)
(105 Points)
Replied 20 May 2010
Hi Nicky,
Australian Trade commission is a part of Australian Embassy (as it is a government), payments made to government does not attract TDS... is not it....???
Sec 195 is applicable for Non-Resident, where as ATC is a resident since it is registered in India & has a PAN also.
Let me know your openion....
Shudhanshu Agrawal
(Business)
(2570 Points)
Replied 20 May 2010
Hi Ayesha,
TDS will be attracted as ATC is not related to Indian Government. Now it can be covered under two section depending upon its residential status. IF the residential status of ATC is non resident then 195 will be attracted but if it is resident then depending upon the nature either in 194C or 194J.
Nicky
(Chartered Accountant)
(245 Points)
Replied 20 May 2010
Ayesha,
Pretty interesting what you said and I agree with Shudhanshu Agarwal on this matter too
But I have my own doubts over service tax issue arising out of sponsorship services and in the given case it attracts TDS on a reverse charge basis
Shudhanshu Agrawal
(Business)
(2570 Points)
Replied 20 May 2010
Hi Nicky,
I want to know what is the meaning of reverse charge basis.
Nicky
(Chartered Accountant)
(245 Points)
Replied 20 May 2010
Service receiver has to pay service tax
kantijain
(Chartered Accountant in Practice)
(385 Points)
Replied 20 May 2010
Hi Ayesha,
I totally agree with agarwal view. Also just because ATC is having PAN does not presume that it is a resident. Please get all the details correctly before going ahead with the payment. Just a word of caution, Especially after the karnataka high court judgement in samsung case, even if the payment made to non-resident are not liable to tax in india it has to either make an application u/s 195(2) or get a CA certificate.
Regards
Kanti Jain
Shudhanshu Agrawal
(Business)
(2570 Points)
Replied 21 May 2010
It is simple to know the residential status of the it. If this payment is made to the Australian Embassy which is in India then its residential status will be resident as per Section 6. But if payment is made to ATC which is not in India then it will be Non resident.
Siddharth
(Student)
(67 Points)
Replied 17 August 2011
Guys, i think Ayesha has a point here. i was doing a similar research and found that any paymnt made to embassy or high commission of a foreign country in India is not liable to TDS as it is not governed by the provisions of the Income-tax Act, 1961.
CAclubindia
