Dear Members,
Request for your kind views, with case laws or section reference, for Applicability of Withholding Tax in case of import of material, if foreign company has PE in India and it has not provided lower deduction certificate u/s 197(1) of income tax act.
Should we deduct the tax at 40%(plus appl. surcharge and cess)?
In such case, It will be hardship for foreign company.
Thanks and Regards
Pankaj Tirthani
Bharat Oman Refineries limited
Mob - 9222224099
Debate on 40% withholding tax for foreign firms with PE in India without section 197(1) certificate for imports. A discussion on the applicability of withholding tax for a foreign company with a Permanent Establishment (PE) in India was initiated. The query sought opinions on whether tax should be deducted at 40% plus applicable surcharge and cess for material imports when the foreign company lacks a lower deduction certificate under section 197(1) of the Income Tax Act. One respondent affirmed the deduction, while another disagreed, suggesting that Tax Deducted at Source (TDS) is not applicable in such cases. The discussion highlighted differing views on tax obligations for foreign entities with a PE in India. (AI Summary)
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