Hi,
We are use LC in PC 550. LC opened with Local Bank SBI. The vendor en cash the LC... we arrange for the credit from foreign Bank I.e Bank of America. Now the Interest and the Principal would be paid the Bank of America thru SBI our LC opening Bank... That interest is subject to Withholding Tax.
Credit could be arrange from the Foreign Bank or Local bank overseas subsidiary, withholding tax would be applicable only to the foreign Bank and not on the local bank overseas subsidiary....
In system SBI is created as as business partner but we don't have the sub business partner (BOA) which could be Foreign Bank.
How to cut withholding tax on Interest payment ?
Regards,
Vishal Patel