Hi, This single question covers two questions in itself Applicability of TDS on consultancy services on NRI (Bhutan Citizen) Requirement of form 15ca/15cb on payment made to a resident of Bhutan. Section 195 of the Income Tax Act, 1961 covers the TDS provision on the payments made by an individualRead more
Hi,
This single question covers two questions in itself
- Applicability of TDS on consultancy services on NRI (Bhutan Citizen)
- Requirement of form 15ca/15cb on payment made to a resident of Bhutan.
Section 195 of the Income Tax Act, 1961 covers the TDS provision on the payments made by an individual by way of interest or any other amount other than salary to an NRI or a foreign company and also requires the payer to furnish an undertaking in the form 15CA along with a certificate of Chartered Accountants in form 15CB.
Now let’s discuss the first issue involved in the question:
The TDS liability in India is to be decided on two levels:
- First with reference to the provision of this section of the Income Tax Act and
- Second with reference to the provision of the Tax treaty/Double Taxation Avoidance Agreement (DTAA) between India and the country of residence of the NR receiver.
Now if you refer the clause 2 of article 12 of the DTTA between the Indian Government and the Roya Government of Bhutan, it is clearly stated that
Royalties or fees for technical or professional services may also be taxed in the Contracting State i.e India, and according to the laws of that State, but if the beneficial owner of the royalties or fees for technical or professional services is a resident of the other Contracting State i.e Bhutan than the tax so charged shall not exceed 10 percent of the gross amount of the royalties or fees for technical or professional services.
Now let’s discuss the second issue involved in the question i.e requirement of form 15CA and 15CB:
Form 15CA and 15CB are not required to be furnished for remittance in two cases:
- if it is covered in the negative list of RBI as per rule 37BB.
- if the remittance is made by an individual and it does not require prior approval of RBI [as per the provisions of section 5 of the Foreign Exchange Management Act, 1999 (42 of 1999) read with Schedule III to the Foreign Exchange (Current Account Transaction) Rules, 2000]
In your case, it is not covered in the negative list, hence forms 15CA and CB is required to be furnished, there is no such exemption for the country of an NRI.
Thanks.
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Yes, GST applicability on advance payments depends on whether the transaction involves goods or services as per the GST law: 1. Advance Payment for Goods 📌 As per Notification No. 66/2017 – Central Tax, GST is NOT required to be paid on advances received for the supply of goods (except in cases coveRead more
Yes, GST applicability on advance payments depends on whether the transaction involves goods or services as per the GST law:
1. Advance Payment for Goods
📌 As per Notification No. 66/2017 – Central Tax, GST is NOT required to be paid on advances received for the supply of goods (except in cases covered under the reverse charge mechanism).
📌 The supplier should issue a Proforma Invoice followed by a Tax Invoice at the time of supply.
2. Advance Payment for Services
📌 As per Section 13(2) of the CGST Act, 2017, GST must be paid at the earlier of:
📌 The supplier must issue a receipt voucher for the advance amount received.
3. ITC (Input Tax Credit) on Advance Payment
📌 The recipient (buyer) can claim ITC once the Tax Invoice is received and the supplier has reported the GST payment.
✅ Final Answer:
- For Goods ➝ GST not required on advance payments.
- For Services ➝ GST must be paid at the time of advance receipt.
- Ensure proper documentation like receipt vouchers & tax invoices for compliance.
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