ITDS from charges paid for participation in Exhibitions out of India

[Rasesh Amin]

Pl let us know whether ITDS deduction is mandatory of charges paid to Foreign companies (with no interest / offices in India) towards services availed by Indian company for participation in Exhibitions held outside India. Banks are insisting for ITDS or asking us to submit necessary certificates from CA regarding exemtion of ITDS. Even CA's are reluctant to issue the same as law is not clear. These service providers (Foreign Companies) have refused to except payments after deduction of taxes because of which we are facing problems in seeking their services for our effective particiaptions. Will appreciate if we get suitable guidance in the above matter at the earliest.

[Anuj Gupta]

Kindly specify in detail what expenses are you incurring ?Kindly also specify the country to which payment is being made. What I can gather from your query is that Indian company is attending a fair organized by a foreign company in country outside India.From what I can understand,you may be incurring the following type of expenses: Rent for space in fair. Stall charges for making of stall. Misc expenses for the same purposes. If the Indian Company is making the payments as described earlier then no TDS is to be deducted.

[Rasesh Amin]

Dear Mr. Anuj Gupta, Thank you for your prompt reply to our querry. Payment is being made to agencies in USA and Canada. Fair is being held in Chicago, USA. You have rightly understood, we are incurring cost toward space rent, stall making charges, services towards labour & handling of exhibits as per the organisers contracted terms. We are also of the firm view that no TDS is deductible for payment towards above purposes, however our bank is insisting for suitable certificate from CA for non applicability of TDS. Can you provide us relevant ruling / sections under which TDS is not deductible on payment towards above.

AI Summary

TDS on overseas exhibition payments may not apply to space rent, stall and handling charges; banks seek CA certificate. Payments to foreign organisers/agents for participation in an overseas exhibition-notably space rent, stall construction/charges and related labour and handling expenses-are stated by the adviser to be not subject to TDS, though banks are demanding a CA certificate or similar assurance for non applicability before allowing remittance.