TDS on Commission to non resident

[Reshma kochar]

Dear Experts,

Please help me out in a query.

Do Commission Income of a non resident for securing export orders for a Indian Company, will be taxable income in India and attract TDS ?

As Circular no. 23, dated 23-7-1969, Circular no. 163, dated 29-5-1975 and Circular no. 786 dated 7-2-2000 has been with withdrawn. and recent AAR rulling dated 22 feb 2012, in case of SKF Boilers and Driers Pvt.Ltd, stating that this commission income of non residents will be taxable in India. 

Please clarify, which stand we can take right now?

Thanks & regards,

Reshma

AI Summary

Taxability of non-resident commission: services rendered outside India may avoid Indian tax and TDS if no PE.
The document analyses whether commission paid to a non resident for securing export orders is taxable and subject to TDS. One view treats such commission as deemed to accrue or arise in India if services are utilized in India, prompting withholding obligations and the option to apply for a withholding determination. The opposing view holds that where services are performed and paid outside India, the agent has no permanent establishment, and activities are confined to export transactions, the commission does not accrue in India and is not taxable nor subject to TDS.