Detailed decision in GE India Technology Centre P. Ltd V/s. CIT and Another (2010) 327 ITR 456 (SC)
Querist :
Anonymous
(Querist) 04 January 2011
This query is : Resolved
Would request someone to give me the detailed analysis of the above case regarding deduction of TDS on interest payment for foreign L/C payment to be 90 days at sight to Japanese supplier. Would like to know with reference to above case law whether we are supposed to deduct TDS from interest payment to foreign supplier (Japanese) for giving 90 days credit for remittance of LC amount.
Vineet
(Expert) 08 January 2011
The sum and substance of above judgement is that it has reversed the decision of Karnataka High Court in Samsung Electronics Case which stipulated that the assessee cannot sit on judgement regarding taxability of a payment to non-resident and has to deduct tax u/s 195 or obtain an order u/s 195(2) from AO.
Any interest payment to Japanese resident is liable to be taxed in India and as per DTAA the tax is deductible @10%.
