TaxTMI 
TaxTMI 
PAN for overseas consultant
09 Jul 2010 
2 Replies 
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PAN requirement for non-residents may trigger higher withholding unless PAN obtained and PE risks assessed.
Non-resident recipients of payments requiring tax deduction at source must obtain PAN; absence of PAN leads to a higher withholding rate. If a foreign company's employees remain in India beyond ninety days in a fiscal year, their presence may create a service permanent establishment, making income chargeable under domestic provisions and the India-Singapore treaty. Advisers recommend that the foreign supplier obtain PAN and that payors seek an order under section 195/197 from the tax authorities before effecting payments to determine appropriate withholding. (AI Summary)
Non-resident recipients of payments requiring tax deduction at source must obtain PAN; absence of PAN leads to a higher withholding rate. If a foreign company's employees remain in India beyond ninety days in a fiscal year, their presence may create a service permanent establishment, making income chargeable under domestic provisions and the India-Singapore treaty. Advisers recommend that the foreign supplier obtain PAN and that payors seek an order under section 195/197 from the tax authorities before effecting payments to determine appropriate withholding. (AI Summary)
Is there a statutory obligation for a overseas company to obtain PAN if they are going to send in their consultant to offer services in India for a period of 5 months? What are the implications of not obtaining a PAN? The company is a Singapore company which has a double tax treaty with India.