Applicability of Withholding Tax on warehousing & logistics services taken from from foreign Company( U.K.)

[Pradeep Jain]

Dear Sir,

We are availing warehousing & logistics services from foreign Company based in U.K. and resident of U.K. as per TRC issued by HM Revenue & Customs – Business Tax Operations Unit , Glasgow but PAN number in India is not obtained by the said service provider. Further, we wish to submit that the said foreign Company does not have any permanent establishment and place of business and dependent agent in India.

We seek your opinion about the applicability of TDS on the payment made to said foreign Company in foreign currency.

Regards

Pradeep Jain

[Ganeshan Kalyani]

Tds is applicable at higher rate is case PAN is not available.

AI Summary

Withholding tax on cross-border services applicable at higher rate where payee lacks PAN for foreign providers. Advisory: Payments to a U.K. resident provider for warehousing and logistics services are subject to withholding tax; if the foreign service provider has not furnished an Indian PAN, the payer must apply the higher rate of tax deduction. The provider has asserted U.K. tax residency and absence of permanent establishment, but the reply confines the operative guidance to the increased TDS rate applicable when PAN is not available.