Does Form 15CB is required for Payment for Purchases?

Form 15CB:

Form 15CB is a certificate to be issued by a Chartered Accountant for the taxpayer when there is a payment or transaction made abroad. Usually, Form 15CA and 15CB are filed together. Form 15CB is to be filed in only cases where payments that are taxable are made to non-residents and exceeds Rs. 500,000 in a fiscal year. This certificate or form is prescribed as per Section 195(6) of the Income Tax Act, 1961. Form 15CB is a Tax Determination Certificate issued by the Chartered Accountant when and where needed. It is always advisable for the taxpayer to issue this certificate even in cases where the Form 15CA is not compulsory or mandatory.

Form 15CB - Ezybiz India Tax Consultant

Important points to remember while obtaining Form 15CB:

There are some important details that should be known to the taxpayer or the Chartered Accountant while obtaining the form 15CB. These keen details are-

  1. Bank details of the remitting transactions.
  2. All the agreements and invoices details.
  3. Details of the payments.
  4. Rate of converting the foreign currencies.
  5. Pricing e-mails in case of the transactions of the group companies.
  6. Proof of the transactions in case of group companies.
  7. Any details of the correspondences.

Process of filing the Form 15CB :

A proper set of steps must be followed by the Chartered Accountant to file the Form 15CB. These steps are-

  1. They need to go to the e-filling portal on Income Tax website. Then the Chartered Accountant should click on the Downloads tab.
  2. Click on the Forms tab. Download Java or excel utility.
  3. Using the utility file prepare an XML file.
  4. Upload the form and enter the PAN or TAN of the assesse and PAN of the Chartered Accountant. Select 15CB as the Form Name. Select Filing Type as Original.
  5. When you are done submit the form. A message of successful submission will be sent on the mobile number. Also, an email will be sent to the registered e-mail id of the Accountant.

Pre-requisites for filing the Form 15CB:

There are certain conditions that are required to be fulfilled before filing the Form 15CB. But the taxpayer should know all about Form 15CA and 15CB for clearly knowing these conditions or pre-requisites-

  1. The taxpayer is required to appoint a Chartered Accountant by adding them on the e-filing portal.
  2. The accountant added must be a registered Chartered Accountant on the e-filing portal of the Income Tax website.

Documents requirement for filing Form 15CB:

The necessary documents required at the time of filing the Form 15CB are-

  1. Digital Signature Certificate of the taxpayer
  2. Permanent Account Number (PAN) or Temporary Account Number (TAN)
  3. Bank statements
  4. Address proof
  5. Particulars of bank
  6. TDS statements

Applicability of Form 15CB in Payment for Purchases:

The taxability on payment for purchases made overseas is categorized as non-taxable. Thus the banks and the authorized dealers never asked for a Chartered Accountant issued certificate through Form 15CB. But the Reserve Bank of India (RBI) through a notice tried to make it clear that such certificate are necessary for TDS for payments on import or purchases. A circular was issued in this regards namely Circular No.3 on 19/07/2007 by RBI. But still there are few banks and authorized dealer that don’t even ask for filing Form 15CB from taxpayers.

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    Author: Anil Agrawal
    EZYBIZ India Consulting LLP, New Delhi. The firm is business and tax consultancy firm providing consultancy in Taxation, Regulatory, Transfer pricing, Valuation, Corporate funding and Business set up matters. He may be reached at 9899217778 or anil@ezybizindia.in.