an Indian company is making payment to a German company towards 'sample analysis charges'(testing Charges), so as to make the particular indian product acceptable in European Countries.based on their parameters,if this product satisfies their technical specification,based on this 'chemical analysis report'they can purchase this product from us. whether this payment attracts provisions of Section 195, Article 12 of DTAA between India & Germany? or can we take benefit of a TMI-31936, as these services were rendered & will be utilised abroad?
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Mr.Harsha, Yes this payment if made to a non resident attracts provisions of section 195.Also is your Company paying charges for earning income outside India.If the answer is yes then the case law reported by you may of some help, but there are other direct case laws which will help you.