Applicabilty 15 CA and 15 CB on Import of goods.

[deepak gulati]

Some time Banks insist on 15 CA and 15 CB for remmittance for import of goods, is any provision is their that they are not applicable where No TDS is required to be deducted ( Import )

[CA.Mohammed Lakkadsha]

I think that bank is correct, even if TDS is NIL form 15CA & CB is applicable. Since all forex transaction need to be scanned for tax implications.

[Aliasgar Tambawala]

Dear Mr. Deepak Gulati,

 

To my knowledge 15CA and 15CB are NOT APLLICABLE in case for remittance to be made for import of goods. We have also come across such transaction and as per our Bankers viz. Bank of India, it would suffice if we given a declaration on our letter head as under:

Quote

"

Dear Sir,

 1)      We propose to make the remittance.

2)      We have been advised that no income tax is to be deducted at source on the following remittances since the remittances does not take the character of income in the hands of the payee.

3)      In case the income tax authority at any time finds that tax actually deductible on the amount of remittance has either not been paid or not paid in full. We undertake to pay the said amount of tax along with interest due;

4)      We shall also be subjected to the provisions of penalty for the said default as per the provisions of then Income Tax Act.

5)      We undertake to submit the requisite documents, etc, for enabling the income tax authorities to determine the nature and amount of income of the beneficiary of the above remittance as well as documents required for determining our liabilities under the Income Tax Act as a person responsible for the deduction of tax at source;

6)      The information given above is true to the best of my / our knowledge and belief and no relevant information has been concealed.

Thanking you.

Yours truly,"

Unquote"

Trust it clarifies.

Regards

Aliasgar Tambawala

 

[CA.Mohammed Lakkadsha]

Dear Mr. Gulati,

The idea behind getting 15CA is to check whether any profit arises to the non-resident , which is deemed to accrue or arise in India. In case of import of goods if the consignor company is having permanent establishment in India viz.. marketing office sourcing order from India, The profit may arise and TDS is dedcutible . Moreover the declaration suggestd by Mr. Aliasgar is more or less a document alike 15CA , means the certificate from C.A as taxability of the transaction and 15CB is intimation to department as regards happing of such transaction.  I remeber a recent decision in International Taxation arena wherein it was held that a non-resident company having PE in India for provinding consultancy and erection services also supplying goods from outside India is liable to taxed on profit element in sale transaction also...Hence In my humble view the certificate should be taken to avoid any further complication.

[deepak gulati]

Thx to all for clarification, actualy the confusion is some Banks require same and some not, lets hope for a clarification on this from Govt.

AI Summary

Withholding tax compliance: obtain Form 15CA/15CB or CA certification when import payments may attract Indian tax liability.
Form 15CA and Form 15CB are used to screen remittances for taxability where payments to non-residents may constitute taxable income; imports of goods ordinarily do not attract TDS and may be supported by a declaratory letter, but if the non-resident has a permanent establishment or profit element is deemed attributable to India then TDS may be payable and a CA certificate plus Form 15CA filing is prudent to document the tax position.