Service Tax Exempt on Foreign Commission

[RAM SHARMA]

Dear Experts,We want to avail service tax exemption under notification no. 18/2009 dt. 7th july 2009 amended notification no. 42/2012 dt. 29th june 2012. I am little confuse in one condition which is mention both the notification is given below :-

         1)The exemption shall be limited to one percent of the free on board value of export goods for which the said service has been used.(As per not. 18/2009)

        2)The exemption shall be limited to the service tax calculated on a value of ten percent of the free on board value of export goods for which the said service has been used. (As per not. 42/2012)

Please interpret above two condition with example.

Thanks & Regards

AI Summary

Discussion on Service Tax Exemptions for Foreign Commissions under Notifications 18/2009 and 42/2012; 10% FOB Limit Explained. A discussion on a forum involves queries about service tax exemptions on foreign commissions under notifications 18/2009 and 42/2012. The initial query seeks clarification on the conditions of these notifications. Responses clarify the exemptions, stating that service tax is exempted on commissions up to 10% of the free on board (FOB) value of export goods. Examples illustrate how service tax is calculated on commissions exceeding this threshold. It is noted that notification 18/2009 is no longer in effect, and notification 42/2012 applies, ensuring commissions to foreign agents remain within specified limits to qualify for service tax exemptions.