under DTAA

[MITSUI PRIME ADVANCED]

Dear Sir,

 I come to know that we have paid Technical Service Fee to our foreign Company of M/s Mitsui Chemical Inc., Japan , services provided or deemed to be providded by MCI japan as a loan Garantee FEE ( as a loan provided to thir Indian Subsidarys) to Mitsui Prime Advanced , India. This is subsidiary of Mitsui Chemical Japan, without under any PE , of Fixed Base , as per DTAA we have deducted TDS 10% under Article 12 of DATT between India and Japan Tax Deduction at Sources (TDS) every time deposited to Central Government Account TDS Deducted by Mitsui Prime Advanced, India on payment of Technical Services, We can claim TDS of Mitsui Chemical Inc., Japan in India. because 70% capital involved in Mitsui Prime, India. Please tell me your valuable secretion under scenario.

 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

Indian Subsidiary's Technical Service Fee to Parent Company Challenged Over TDS Deduction Under DTAA Article 12 A query was raised regarding the payment of a Technical Service Fee by an Indian subsidiary, Mitsui Prime Advanced, to its parent company, Mitsui Chemical Inc., Japan. The issue involved the deduction of Tax Deducted at Source (TDS) at 10% under Article 12 of the Double Taxation Avoidance Agreement (DTAA) between India and Japan. The payment was for a loan guarantee fee without a Permanent Establishment (PE) or Fixed Base in India. The respondent advised that the applicability of TDS under Section 195 and related provisions requires a detailed examination of the facts and law.