foreign commission agent reverse charge

[satbir singhwahi]

Commission is paid to foreign agent resident outside India , whether reverse charge is applicable now.

[PAWAN KUMAR]

Dear Sir,

As per my view, reverse charge is applicable on commission paid to foreign agent.

[MUKUND THAKKAR]

RCM is not applicable in case of commission is paid to foreign agent, as per my view you no specifically this service is define in rules under RCM.

[PAWAN KUMAR]

Dear Sir,

For reverse charge, Please read the S.No.10 of notification No.30/2012-ST dated 20.06.2012.

[satbir singhwahi]

Sir

There is change in place of provision from 01.10.2014, so position of foreign commission agent for goods exported from India may not be taxable service.

[Rajagopalan Ranganathan]

Dear Shri. Wahi,

Vide Sl. No. 10 of Notification No. 30/2012-ST dated 20.06.2012 in respect of any taxable services provided or agreed to be provided by any person who is located in a non-taxable territory (outside India) and received by any person located in the taxable territory (in India) 100% of the service tax is payable by the service receiver located in India. Therefore you are liable to pay service tax under RCM.

[Rajagopalan Ranganathan]

Dear Shri. Wahi,

Rule 9 of Place of Provision of Services Rules,2012 (herein after called 'the Rules') provides that the place of provision of intermediary services shall be the location of the service provider.

Rule 2 of the Rules defined “intermediary” means a broker, an agent or any other person, by whatever name called, who arranges or facilitates a provision of a service (hereinafter called the ‘main’ service) between two or more persons, but does not include a person who provides the main service on his account.

The definition of the term intermediary was amended with effect from 1.10.2014 by . Notification No. 14/2014 - Service Tax dated 11th July, 2014 as under: -

'Intermediary' means a broker, an agent or any other person, by whatever name called, who arranges or facilitates a provision of a service (hereinafter called the 'main' service) or a supply of goods, between two or more persons, but does not include a person who provides the main service or supplies the goods on his account.

In view of the above you need not pay service tax under RCM in respect of service provided by a commission agent located outside the taxable territory. My previous opinion will not be valid from 1.10.2014.

[RAM SHARMA]

We are availing s.t - exe mption on commission paid to our overseas agent and subsidiary company under not 42/2012. Now, whether we required to file half yearly s.t.return under not. 42/2012. Thanks

[PAWAN KUMAR]

Dear Sir,

Place of provision of service only deals with service location where these are being provided/completed/performed not the taxability. Rule 2(f) of Place of provision of service rules only amended the definition of Intermediatery.

Notification No.30/2012 - ST dated (S.No.10) provides taxable portion of service provider/service receiver irrespective of the place of provision of service, therefore service tax is liable on commission agent service. If you wish to obtain exemption, the same can be claimed subject to compliance under notification No.42/2012-ST dated 20.06.2012.

[PAWAN KUMAR]

Dear Sir,

Please ignore my previous reply which was wrongly submitted.

The reply given by Sh.Rajagopalan Ranganathan is correct. There is no tax liability as per new change on commission paid to foreign agent from 01.10.2014.

As per my view, No need to submit the Form EXP-4 from 01.10.2014.

[Tax Baniya]

As per recent amendment in Rule 9 of place of provision of service from 01.10.2014 service tax on export commission is exempt while it is applicable on import commission.

AI Summary

Reverse charge on foreign commission: amendment to place-of-provision rules removes RCM liability for commissions paid to overseas agents. Earlier S.No.10 of Notification No.30/2012-ST made services received from persons located outside India taxable under reverse charge, placing liability on the Indian service recipient. An amendment to the Place of Provision of Services Rules redefined intermediary and located intermediary services at the provider's location, resulting in commission paid to foreign agents not being taxable in India under the reverse charge mechanism. Exemption notifications remain available subject to their compliance requirements.