One of my client has started business if tour and travel. He makes payment to foreign companies for booking of Hotel Accommodation on behalf of his clients. He asks me to provide certificate u/s 15CB. Those foreign companies have no permanent establishment in India. Is there any TDS liability on my client ? Please advise me the correct position of law.
CA. Rajeev Jain
camanojgupta is right in principle but I would request for more information:
(i) In which country is the recipient situate? Is there a AADT with the Govt of that Country?
(ii) Does the AADT provide for the taxation of "management" or "consultancy" services like s. 9(1)(vii)?
(iii) Are the recipients the hotels or agents acting for them?
(iv) Is there an agreement with the recipient? Does the agreement provide for the rendering of any "management" or "consultancy" services by the recipient? What are the other relevant terms of the agreement?
(v) Does the recipient have any office or tie-up with parties in India? Does he have transactions with other parties like your client? What have the other parties done at the time of remittance?
On the Q of a PE, you should obtain a sworn statement or affidavit from the recipient that he has no PE in India.
