DTAA under locan Gurantee Services

[MITSUI PRIME ADVANCED]

Dear Sir,

We have involved in foreign payment under Loan Guarantee Fee Loan is provided by JABIC( Japans Association of Borrowing Corporation) We have paid installment to Mitsui Chemical Inc., Japan. We have registered under Companies Act, 1956, with name of Mitsui Prime Advanced Composites India Pvt India . MPAC, India paid Installment against loan to MCI, Japan ,

in this above scenario   attract Double Taxation Avoidance Agreement between India and Japan

TDS is deductible under DTAA on loan guarantee Services

please provide your valuable advice.

 Regards

Arjun Sachdeva

[Rama Krishana]

The payment made to Mitsui Chemical Inc., Japan. if liable to TDS as per the provisions of Section 195 read with Section 9 and DTAA and any other related provisions, you need to deduct TDS. But, I think it requires detail and indepth examination of facts and law.

AI Summary

TDS on cross-border guarantee fees may be required under DTAA principles; assess treaty relief and source taxation. Whether payments by Mitsui Prime Advanced Composites India Pvt Ltd to Mitsui Chemical Inc., Japan for loan-related obligations attract India-Japan DTAA treatment for loan guarantee fees and whether tax must be withheld at source. The advisory notes that withholding obligations arise if the payments constitute taxable income sourced to India and that TDS should be considered under domestic withholding provisions read with income attribution rules and the DTAA; a detailed factual and legal examination is required for a conclusive view.