Exchange Rate for imported goods is Rs 74.03 Per Pound Sterling and Rs 51.22 Per Yen-Exchange Rate for export is Rs 72.45 Per Pound Sterling and Rs 49.94 Per Yen-Customs Non-Tariff Notification No.128 Sensex slips further and closes at 8773 100 per cent EOUs allowed to export non-basmati rice-DGFT Notification No.59 Customs duty of 5 per cent imposed on import of Pig Iron, spiegeleisen, semi-finished products, flat products & long products Import of Crude Soyabean Oil subjected to 20 per cent customs duty- no change in import duty on refined soyabean oil-Customs Tariff Notification No.122 Time-limit for filing refund of service tax extended to 6 months-Service Tax Notification No.32 Rahul Bajaj asks Industry to prepare for the worst Tariff Value for import of Brass Scrap is 3525 and for poppy seeds 5206-Customs Non-Tariff Notification No. 127 CBEC clarifies the entire amount of duty paid by the manufacturer, as shown in the invoice would be available as credit irrespective of the fact that subsequent to clearance of the goods, the price is reduced by way of discount or otherwise-Central Excise Circular No.877 Mandavariya (Kishangarh), District Ajmer notified for Unloading of imported goods and loading of export goods-Customs Non-Tariff Notification No.117 SC Ruling-the entitlement of benefit in terms of Section 32AB, Section 80HH and Section 80I of the Income Tax Act- conversion of Jumbo rolls of photographic films into small flats and rolls in the desired sizes amounted to manufacture/production-AIT-2008-413-SC SC Ruling-Whether any "gift" arose in terms of Section 2(xii) of the Gift-tax Act, 1958 on the allotment of rights issue by the appellant company to its shareholders vide Board's Resolution- Whether there was any element of "gift" as defined under Section 2(xii) in the appellant issuing Bonus shares in the ratio of 1:23-AIT-2008-412-SC DEPB benefit allowed on export of cement and steel-DGFT PN 108 exports of cement in all types and forms and primary steel products eligible for export incentives under Focus Market Scheme-DGFT Notification No.58 Import of Marble Tiles-DGFT Notification No.57 Clarification on setting up Duty Free Shops approved by FIPB-Customs Circular No.19 HC Ruling-Income Tax-"reserves" arising out of the acquisition of the business of Tata Cellular Limited could never have the character of "income" in the hands of the petitioners-pre-requisite condition contained in proviso to section 147 to enable the re-assessment to be opened after period of 4 years have elapsed have not been met-AIT-2008-410-HC HC Ruling-Central Excise- valuation of the goods for the purpose of excise duty and whether excise duty was chargeable under Section 4 or Section 4A of the Central Excise Act 1944-while construing rule 3, who are excluded are only the institutional or industrial consumers as explained in Rule 2A and the industrial or institutional consumers in terms of the proviso to rule 2(p) for the purpose of chapter-II are the same-If the person who purchase the prepacked commodity not directly from the manufacturer or packers, they are consumers and the declaration will be of no effect-AIT-2008-408-HC Government considering imposition of import duty on steel Bad News for Consulting Engineers- whether turnkey contract can be vivisected?- The conclusion in Daelim case on the point, prima facie, being not in accordance with law, matter goes to Larger Bench-AIT-2008-405-CESTAT Larger Bench of CESTAT rules Credit is admissible on an input service relating to the business-AIT-2008-407-CESTAT credit of the service tax paid on the outdoor catering (canteen) service is admissible as input service under Rule 2(l) of the Cenvat Credit Rules, 2004-AIT-2008-406-CESTAT The payment for use of "services for MTNL/other companies via the interconnect/port/access/toll by the assessee would not fall within the purview of payments as provided for under section 194J of the Act, so as to be eligible for tax deduction at source-The interconnect charges/port access charges cannot be regarded as fees for technical services-AIT-2008-404-HC Computation of Value under Section 14 for Levy of Export Duty - Customs Circular No. 18 Advance Ruling- Whether the service fee paid by the applicant to Intertek Testing Management Limited UK under Global Management Service Agreement is taxable as "Royalties & Fee for Technical Services" as per the provisions of Article 13 of DTAA between India & UK? Whether the applicant is required to deduct tax at source on the service fee paid to Intertek Testing Management Limited, UK, at the rate of 10% plus applicable surcharge and cess as per the provisions of section 115A(1)(b)(BB) of the Income-tax Act-AIT-2008-401-AAR Larger Bench of SC Ruling-whether the revenue can be precluded from filing an appeal even though in respect of some other years involving identical dispute no appeal is filed -AIT-2008-403-SC SC Ruling-whether transfer of Banking Undertaking gave rise to taxable capital gains under Section 45 of the 1961 Act-it was not possible to compute capital gains and, therefore, the said amount of Rs. 10.20 cr. was not taxable under Section 45 of Income Tax Act-AIT-2008-400-SC Export duty of 8 per cent notified in place of earlier rate of Rs. 200 per tonne on export of iron ore fines-Customs Tariff Notification No.121 Pan Masala Packing Machines (Capacity Determination And Collection of Duty) Second Amendment Rules, 2008-Central Excise Non-Tariff Notification No.45 SC rules Ethylene and propylene manufactured by the assessee and used in its factory in the further manufacture of the same goods would be entitled to the benefit of exemption contained in notification no.217/86-AIT-2008-398-SC New DEPB Rates on export of all products notified–DGFT PN 102 service tax paid under Section 66A is available as 'input credit' under Cenvat Credit Rules, 2004 provided the said services are used as input services by the manufacturer or producer of final products or a provider of output taxable service-Service Tax Trade Notice No.43/2008 Anti-dumping duty imposed on import of cable ties from China & Taiwan-Customs Tariff Notification No.118 Definitive Anti-dumping duty imposed on import of Phenol from Singapore, South Africa & European Union-Customs Tariff Notification No.114 High-tech products entitled to benefits under High-Tech Products Export Promotion Scheme –DGFT PN 101

JUDGMENTS

CENTRAL EXCISE

CUSTOMS

exchange rate

SERVICE TAX

INCOME TAX

VAT

FINANCE ACTS

FINANCE BILLS

EOU STPI

SEZ

DGFT

RBI

NTT

RESOURCES

Email | Print

Non resident agents rendering services outside India & getting payment outside India liable to income tax in India : Advance Ruling

AIT News Network

NEW DELHI. Authority for Advance Rulings (Income-Tax) vide a recent ruling AIT-2006-73-AARhas ruled that non resident rendering services outside India and also getting payment outside India, will be liable to income tax in India on account of his being agent of resident in India when the source in income is situated in India. Further,T.D.S. is to be deducted from payment which will be remitted by resident to the non resident agent.

The Facts: The applicant wanted to appoint agents abroad to furnish information about terms & conditions to foreign participants in respect of their participation in the Food & Wine Show in India and for booking space in the exhibition. The agents would be rendering services abroad in the territory allotted to them and would be entitled to receive commission abroad for the services so rendered to foreign participants. Since the services are rendered by non-resident agents outside India and according to the terms of the agency agreement, the payment is also receivable by the agent abroad, the agent is not liable to tax, in view of the provisions of Section 5(2) read with section 9(1) of the Act. The Agent was to be responsible for planning, directing and executing sales campaign and the services to be provided by the Agent were as follows:

· The Agent will be responsible for liaison with government departments and trade associations to endeavor, where and when appropriate, to obtain National Pavilions / joint participations.

· The Agent will be responsible for distributing to exhibitors the contract forms, invoices for space and shell scheme sales and for the distribution of all relevant materials and application forms for stand fitting, furniture and other on-site services.

· The Agent will attend where appropriate, exhibitor meetings and will ensure that adequate briefings are given to them prior to their departure for India to participate in IFOWS.

· The Agent will provide support to LEMS with regard to all promotional activities related to IFOWS that it may decide to undertake in the Agent’s territory. Particularly, the AGENT will assist LEMS during its meetings with potential exhibitors, government bodies and export promotion bodies taking place in the AGENT’s territory.

· The Agent acknowledges that the exhibitors are required to make all the payments directly to LEMS. The AGENT will assist LEMS and make its best efforts to induce exhibitors to fulfill their contractual obligations with regard to the payments owned to LEMS.

· The Agent will never accept in his favour any payments that exhibitors owe to LEMS unless authorized by LEMS in wirting. Even if the AGENT accepts any payments after having received written authorization from LEMS, such action should not result in any extra cost for LEMS.

· The Agent will assist LEMS and ensure that the exhibitors adhere to the general regulations governing their participation in IFOWS.

· The Agent will ensure that the exhibitors submit the contract form, catalogue entry form and forms for onsite services to LEMS as per the stipulated deadlines.

Questions before Authority:

Question 1: Considering the fact that non resident would be rendering services outside India and also getting payment outside India, whether he will be liable to income tax in India on account of his being agent of resident in India?

Question 2: In case answer to the above is negative, whether T.D.S. is to be deducted from payment which will be remitted by resident to the non resident agent.

Observations of the Authority: Source of income for the agent is participation by the exhibitors in exhibition/food & wine show in India and the agent will not be entitled to receive any commission for services rendered in case the exhibition is not held due to unforeseen circumstances. No doubt the agent renders services abroad and pursues and solicits exhibitors there are in territory allotted to him but the right to receive the commission arises in India only when the exhibitor participates in India international food & wine show to be held in India). And makes full and final payment to the applicant in India. The commission income would, therefore, be taxable under the act in view of the specific provision of section 5(2)(b) read with section 9(1)(i) of the Act. The fact that the agent renders services abroad in the form of pursuing and soliciting the participants and that the commission is remitted to him abroad are wholly irrelevant for the purpose of determining the situs of his income.

Ruling of Authority:

Question 1 : The fact that non-resident would be rendering services outside India and also getting payments outside India , are wholly irrelevant considerations. the source in income being situated in India ,the agent will be liable tax in India under the Act;

Question 2 : Since answer to question No. 1 is negative, tax is required to be deducted at source from payments which will be remitted by the resident applicant to the non-resident agent.

( Click here for full text of ruling AIT-2006-73-AAR )