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

Withholding tax on technical service fees may be required under treaty and domestic law; creditability needs factual analysis. If payments to the foreign parent qualify as taxable technical service or similar income under domestic source rules and the India-Japan DTAA, the payer must withhold tax at source under domestic withholding law and the treaty; whether the withheld tax is creditable and the correct characterization of the payment requires detailed factual and legal examination, including consideration of the nature of services and any permanent establishment or fixed base.