Only income which is taxable under I T Act can suffer withholding tax or TDS. Therefore, it is important to decide whether the payments to a foreign company for exhibition space is taxable under I T Act in India.
Section 5 of the I T Act meaning of total income in case of Non Resident in following words:
(2) .. the total income of any previous year of a person who is a non-resident includes all income from whatever source derived which
(a) is received or is deemed to be received in India in such year by or on behalf of such person ; or
(b) accrues or arises or is deemed to accrue or arise to him in India during such year.
Therefore, the payment is beyond the scope of being assessed in India and as such no tax is required to be deducted , in my opinion.
