TDS on software purchase from Foreign vendor

[Arther Kishore]

Assessee is purchasing ' Perpetual license for a single instance of CHARON-SSP/4U L30 on one host system. Includes software and license key for USD 22540. Here assessee is being treated as licensee and one License agreement is being executed. Licensor grants a non exclusive right to use the licensed functionality of the software to run a single instance. Software will be downloaded after payment.Vendor retains the copyright , intectlectual property,title and ownership of software.Vendor has no business connection or Permanent Establishment in India.

Whether TDS is applicable on payment to foreign vendor ?

[DR.MARIAPPAN GOVINDARAJAN]

Whether the payment has been made out of India or in India. If it is made out of India in your case no TDS is required. It is my view.

AI Summary

TDS on cross-border software license payments: no withholding where payment is made outside India, per view. Whether TDS applicability arises on payment for a perpetual foreign software license depends on the payment's origin; the advisor's view is that if the consideration is paid from outside India, no withholding is required, given the vendor retains intellectual property and lacks a permanent establishment or business connection in India.