Under DTAA india and japan

[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 Company 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 ?

under Artical 12 or artical 22 

TDS rate 10% 

or in this case locan sentancy not in teratry than applay 40% TAX in the case of fourign Compnay?

 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

Withholding tax on loan guarantee fees may apply under domestic law and the India-Japan DTAA; facts determine liability. Query whether a loan guarantee fee paid to a Japanese company attracts Indian TDS under the India-Japan DTAA and domestic law; the respondent advised that if the payment is taxable under Section 195 read with Section 9 and the DTAA, TDS must be deducted, but that a detailed fact-specific legal examination is necessary to determine liability and treaty application.