Subscribe to the Bombay Chartered Accountant Journal Subscribe Now!

May 2008

Clarification from RBI for deduction of tax at source on remittance of foreign exchange for import purposes : No. FE.CO.FID.5759/22.20.001/2007-08, dated 11-9-2007.

By Pinky Shah, Sonalee Godbole, Gaurang Gandhi, Chartered Accountants
Reading Time 1 mins
fiogf49gjkf0d

New Page 1

24. Clarification from RBI for deduction of
tax at source on remittance of foreign exchange for import purposes : No.
FE.CO.FID.5759/22.20.001/2007-08, dated 11-9-2007.


As per the provisions of S. 195 of the Act, while remitting
any sum chargeable under the Act to a non-resident, tax needs to be deducted at
source. There was some confusion regarding tax to be deducted from remittances
for import of articles or things or computer software, etc. As per A.P. (DIR
Series) Circular No. 3, dated 19 July 2007, RBI clarified that remittance for
such imports also would need CA certification and the procedures prescribed in
CBDT Circular No. 10/2002 (F.No. 500/152/96-FTD) need to be followed. Since
various trade bodies and banks have approached RBI expressing their
apprehensions and difficulties in this matter, RBI has once again taken up the
matter with CBDT. Pending any clarification from the Board, it has been
clarified that the procedure prescribed by CBDT needs to be followed and in case
there are any doubts, the taxpayer needs to approach the Board directly.

 

Download PDF

You May Also Like

Clarification regarding approvals of 100% EOUs for the purpose of deduction u/ s.10B of the Act — Instruction No. 2/2009, dated 9-3-2009 (reproduced).

Clarification regarding period of validity of approvals issued u/s.10(23C)(vi) or (via) and u/s.80G(5) of the Act — Circular No. 7/2010, dated 3-10-2010.