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TMI BlogROYALTY PAYABLE TO FOREIGN COMPANY BUT PAID IN INDIAX X X X Extracts X X X X X X X X Extracts X X X X ..... Dear Experts, I have one query A Pvt Ltd, an Indian company has to pay royalty to B a foreign company to the extent of Rs.10 core. Now B company directed the A pvt ltd to pay this royalty amount of Rs.10 crore to C Pvt Ltd (Supplier of B company in India). C Pvt ltd will adjust entire amount towards export realisation to be received from B company. Now my questions are: 1. Whether A Pvt Ltd can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pay directly to C Pvt Ltd? 2. If so, whether GST has to be paid and TDS has to be deducted? 3. Whether tri-party agreement required to do so? 4. Is there any problem for C Pvt Ltd to get this amount from A Pvt Ltd? Since export proceeds going to be received in India Rupee. Kindly clarify experts. - Reply By KASTURI SETHI - The Reply = Sh.Sudhakar Sivaraman Ji, Query-wise reply is as unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r :- 1. Yes. 2. If IGST was already paid on royalty and license fees as duty of Customs while importing the goods, then IGST will not be payable again . Read Notification No.6/18-IT(Rate) dated 25.1.18 read with Section 3(7) of the Customs Tariff Act and Section 14(1) of the Customs Act and Rule 10(1) (c) of Customs Valuation (determination of Value of Imported Goods) Rules, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 07 and Section 5 of IGST Act, 2017 . TDS on GST has to be paid. If goods and services are not taxable, TDS on GST is not required to be paid/deducted. 3. Yes. However, it depends upon the Authorised Bank. Final decision is to be taken by the Authorised Bank. 4. No. Transaction should be through VOSTRO Account. Pl. note that the Authriised Bank must be satisfied regarding the genuinene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss of transaction. If the Authorised Bank is not satisfied with the bona fides, the bank may direct to seek permission from RBI regarding relaxation mentioned in 3 4 above of the reply. Disclaimer : These are my personal views for academic and education purposes and not meant for legal proceedings in any Court. - Reply By KASTURI SETHI - The Reply = In continuation to my above reply, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he invoice to be raised must be comprehensive. - ROYALTY PAYABLE TO FOREIGN COMPANY BUT PAID IN INDIA - Query Started By: - SUDHAKAR SIVARAMAN Dated:- 16-11-2023 Last Replied Date:- 21-11-2023 FEMA - Got 2 Replies - FEMA - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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