Intermediary service rule: commissions paid to Indian agents for inward remittances are taxable under service tax. Money remitted from abroad is not itself a taxable service. Indian banks or entities acting as agents for foreign MTSOs are intermediaries; under the Place of Provision of Service Rules the place of provision is the agent's location in India, making commission or fees received from the MTSO liable to service tax. Fees charged to recipients in India and commissions to sub agents are likewise taxable. Currency conversion by Indian entities is a separate taxable activity.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Intermediary service rule: commissions paid to Indian agents for inward remittances are taxable under service tax.
Money remitted from abroad is not itself a taxable service. Indian banks or entities acting as agents for foreign MTSOs are intermediaries; under the Place of Provision of Service Rules the place of provision is the agent's location in India, making commission or fees received from the MTSO liable to service tax. Fees charged to recipients in India and commissions to sub agents are likewise taxable. Currency conversion by Indian entities is a separate taxable activity.
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