TDS u/s 195, Income Tax

[Dhirendra Srivastava]

Dear All

The facts are as follows:

B Ltd (India) is a subsidiary of A Ltd ( Japan ). A Ltd Japan recovers from B Ltd  the cost of usage server.

In other words, the parent company in Japan incurrs cost of server and allocate the cost to its subsidiary company and

accordingly recovers the same from the Subsidiary company in India.

Query:

Is the Indian Subsidiary is required to deduct any TDS on payment made to Parent company for usage of Server located in Japan.

Please let me know any other information required to solve the query.

Posts / Replies

[hari saini]

Yes, WHT to be deducted on usage of server. This will be covered under fee for technical service & royalty nder sec 195 and WHT to be deduct accordingly.

[Dhirendra Srivastava]

ThanksMr.HAri

 

But if it an be proved that Some other vendor is residing in the country where parent co. is situated had raised the invoice for such usage and remmitance is actually equal to the invoice raised by such outside vendor, then whether it will amount to reimbursement and accordingly no TDS would have been Deducted

[hari saini]

Hi Dhirendra,

IF vendor is providing Invoice with supporting of actual bill  than no WHT will be deduct  as this will be treated as Reimbursement of expenses.