HC RULES AGAINST TDS ON ALL FEES TO FOREIGN ENTITIES
- Delhi HC has ruled that since the Indian subsidiary of the Netherlands-based Van O:ord ACZ Marine Contractors was refunded the amount withheld from a reimbursement in the past, therefore, the Dutch company was not liable to pay tax in India and hence it's Indian arm need not withhold tax.
- Earlier, Karnataka High Court had ruled that tax has to be deducted in India from all payments made to overseas entities.
- Karnataka HCs ruling was based on the premise that the taxpayer did not have the expertise to decide if a particular income was taxable or not in India. The decision would have to be left to the authorities.