Taxes for a US based ecommerce service company

Hello,
I have a US based service company that will extend its services to India. What are the tax implications for doing business with Indian clients. I will be paying the corporate tax, income tax and other taxes in USA as the company is registered here. Please note that there won't be any office in India as the service is provided by website. 
Thanks in advance!!

Regards
Ashish
Asked 1 year ago in Corporate Tax from Santa Clara, CA, USA, Delhi
There can be an element of service tax if the services are consumed in India, which is 14 % of Invoice value. This has to be examined in detail with facts to ascertain with place of provision of services rules.

If your services are treated as professional and technical services under Indian Income tax Act, then under section 9, such services income will be taxable in India even if services are rendered online. please examine with detail facts.
Vijay N. Kale
CA, Hyderabad
248 Answers
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A foreign company can be taxed in India depending upon its source of income .   The income can be characterized  into three type - Income from Business & profession ( Applicable only if you have some presence in India , generally called permanent establishment ) , fee for technical  services ( the definition is wide and it can be taxed irrespective of your presence in India ) and Royalty (( the definition is wide and it can be taxed irrespective of your presence in India ) . So nature of your business is much more important to understand the tax ability in India rather than the mode of payment like credit card or the platform of working  .
Since your company is a resident of USA ,  the tax that you will pay in India , can be claimed as relief while paying the tax in USA under the India USA DTAA .
There is no dual taxation . The tax paid in India can be claimed as relief in USA as USA is the resident country of the company .
Prakash Sinha
CA, Delhi
112 Answers
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Its a query addressed to CA Kale.
B Vijaya Kumar
CA, Hyderabad
290 Answers
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If the income accrues in India and u have permanent establishment here then it will be taxable in India. In the present case u have no permanent establishment. Thus as per our view there will not be any income in India and thus you will not be taxed here. You need not take service tax, income tax
Shyam Sunder Modani
CA, Hyderabad
955 Answers
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If it is an online tool then it may be termed as technical services and section 9 becomes operative and buyers will have to deduct tax from the service charges at source and pay to income tax department
Vijay N. Kale
CA, Hyderabad
248 Answers
4.9 on 5.0
  Talk to Vijay N. Kale

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