Section 195

[CA Rachit Agarwal]

Company 'A' is a resident assessess. 'A' export some material to other country. Material is subject to analysis by a non resident of the country to which it exports. Company 'A' makes the payment for analysis charges to non-resident.

1. Whether the analysis income is chargeable to income tax in India?

[CAGOPALJI AGRAWAL]

Dear Rachit Ji, as appears from querry, it seems that this is not payment for FTS and non resident has no PE in India, it would not be taxable in India.

AI Summary

Taxability of non-resident analysis fees: not treated as FTS and not taxable in India without PE. Payment by an Indian resident to a non-resident for analysis of exported material is not characterised as Fees for Technical Services and, given the absence of a Permanent Establishment of the non-resident in India, the analysis income is regarded as not chargeable to tax in India.