Hi.
As a Freight forwarder, we use to get Debit Notes from Freight forwarders around the world who are our network agents. These debitnotes are in foreign currency mostly in USD and sometimes in Euro & GBP. These are for the Freight charges paid by the Agents on our behalf and some handling charges for the services provided by the agents for us.
My question is:
Are the remmittances made to these agents around the world for the debit-notes raised by them ( some times Credit note given by us) is subject to deduction of TDS. If yes then under what section and what is the rate of deduction.
Is there any judgement on opinion given by expert panel on this subject.
please advice.
TDS Not Applicable on Payments to International Agents for Freight Services Rendered Outside India Under Section 195 A company in India, acting as a freight forwarder, inquired about the applicability of Tax Deducted at Source (TDS) on payments made to international network agents for freight and handling charges. The payments are in foreign currencies like USD, Euro, and GBP. One response clarified that if services are rendered outside India by independent agents, these charges are not taxable in India, thus not subject to withholding tax under Section 195. Another response noted that if freight charges relate to goods shipped from Indian ports, they fall under Section 44B, but Double Taxation Avoidance Agreements (DTAA) benefits may apply. (AI Summary)
TaxTMI 
TaxTMI 
