Foreign Company Invoicing Indian client

[Guest]

Hi,
We are a Canada based firm with 100% ownership of an NRI. Currently, we have no presence in India and are looking to provide Digital Marketing services to our client in India. We need to raise an invoice in INR to our client and we are not sure of the tax implications for the same. It will be very helpful if you could please guide us on the Indian taxation rules. What we understand currently is this:

1. Will TDS need to be deducted from the payment done by the client. How much will this be and will we need a PAN for the client to be able to deduct TDS in the first place?

2. Will we need to file returns in India despite having no presence in the country?

3. Will we have to charge Service tax to our client? If yes, will we have to file returns in that case?

It will be very helpful if you could also please provide details on how to best be able to bill our client. Looking forward to your replies. Thank you.

Regards,

Div

AI Summary

Tax Deducted at Source obligations on cross-border digital services affect invoicing, documentation and filing requirements. Cross-border supply of digital marketing services by a foreign company to an Indian client raises whether the Indian payer must withhold Tax Deducted at Source (TDS), whether the supplier's tax filing duties arise absent physical presence (notably if a permanent establishment or India sourced income is found), and whether service tax applies to such services, with attendant invoicing, documentation and return filing implications.