TDS on commission to a foreign company

[Shiva S]

Dear Expert, 

 

We have an contract with a foreign company for getting orders with some companies in India. we have to pay the differnce amount of PO value and actual cost (as agreed by both of us) to the foreign company. kindly clarify whether TDS attract in this case and if yes, what is the percentage.  Also the service tax implication in the transaction

 

Thanks

AI Summary

Withholding tax on cross-border commission payments: payer must deduct tax when crediting or paying income under Section 195.
Payments to a foreign company for commission are subject to withholding: the payer must deduct tax at the time of credit to the payee or at payment, whichever is earlier, and withhold at the rates in force; the payer must treat the remittance as income chargeable under the Act for this purpose.