Fema on tour operators

LRS is applicable to individual residents only

1. You are not covered under LRS, therefore limitation of remittance upto USD 2.50 lacs per financial year is not applicable to the Company

2. Yes you need to deduct TDS u/s 195 subject to provisions of DTAA with such foreign country. Also submit Form 15CA and 15CB

GST is also applicable on import of services. It is paid on RCM basis (Reverse charge mechanism) and ITC is available on paid basis

For detailed discussion you may opt for phone consultation

If you are working as proprietorship concern banks will apply the LRS limit on you otherwise not.

Deducting TDS on foreign supplier would depend on nature of service you take from them if you are just purchasing packages from them then no need to deduct TDS if you have No SEP (significant economic presence), No PE (permanent establishment) and TRC from them.

Hope you find the information helpful, if yes do rate if 5 and provide your valuable feedback for my improvement.

Thank you.

Hello Sir

Kindly note following

1) You are not making payment under LRS, but the payment is done under business expenses So you can make any amount of remittance without any restriction.

2) There is no need to deduct TDS on any of the payment made

Hello ,

Hope you are doing well!!

1. Since the Liberalized Remittance Scheme (LRS) is applicable to individual residents only, the limitation of remittance up to USD 2.50 lakhs per financial year does not apply to your company. As a tour operator making remittances on behalf of corporate clients, you are not subject to this individual remittance limit.

2. When remitting funds to overseas suppliers, you would need to deduct Tax Deducted at Source (TDS) under Section 195 of the Indian Income Tax Act. The specific rate of TDS and any applicable provisions of the Double Taxation Avoidance Agreement (DTAA) with the foreign country would need to be considered. Additionally, you would be required to submit Form 15CA and 15CB, which are related to the reporting of remittances under the Income Tax Act.

Hope you find the information helpful. You are free to contact me for further discussion.If you could spare two minutes of your time to write a review, It would be really grateful and very happy to read it.

Thank you.

Shubham Goyal