ONE COMPANY HAS AWARDED A INFRA PROJECT TO A FOREIGN FIRM . FOREIGN FIRM HAS SUBLET TO OTHER INDIAN FIRM/ COMPANY , WHICH IS APPROVED BY PRINCIPAL COMPANY . COMPANY IS MAKEING PAYMENT DIRECTLY TO SUB CONTRACTOR & DEDUCTING BOTH TDS AND WCT . BUT COMPANY IS ISSUEING WCT CERTIFICATE IN FAVOUR OF MAIN CONTRACTOR i.e FOREIGN FIRM .WHETHER THE ACT OF PRINCIPLE COMPANY IS LAWFUL ? PLEASE CLEAR THE DOUGHT .
1 Replies
MJ Krishnamurthy
(ACCT(Retd))
(7197 Points)
Replied 12 October 2013
Once a foreign firm is permitted to do business in India they can do it like any Indian company. Handing over an entire work to a sub-contractor is allowed.An agreement can also be made engage a sub-contractor on specific terms like project consultant etc.The principal company can deal with the subcontractor directly in accepting bills making payment and do tds also. In this case the main contractor will play the role of a consultant getting payments at agreed rates on the progress of work......mjk
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