Commission reciept

[Guest]

Dear Sir,

Mine is a proprietorship company in India. I am acting as an agent/consultant to a foreign company for export of goods of one country to another country (not India). For this , exporting company is remitting commission to my account in India. ( say 2 to 5% of invoice value)

For this any TDS, service tax , and income tax applicable.

From the commission received in above case ,I have to pay back 50 % to a Foreign agent who is partner in this particular business. Whether I have to deduct tds, service charges/income tax

Please help me in giving correct advice.

thanks and regards

Gopal Shetty

[YAGAY andSUN]

Dear Gopal,

For query number 1 please check POPS Rules of Service Tax Laws in this regard. For query number 2 service tax would not applicable but check the provisions of FEMA before remitting the money out of India.

Regards,

YAGAY and SUN

(Consultants - Business, Management and Indirect Taxation)

[Guest]

Dear Sir,

In the above question , my main point , whether I can receive commission in India from foreign countries for the consultancy done in foreign countries . Is there any FEMA restrictions. Kindly help in giving advice in this matter.

Regards

Gopal Shetty

[kalyanaraman Venkatraman]

It is covered under FEMA current Account Transactions, there is no restrictions under FEMA for the payment.

with respect to the deduction of TDS, contract between you and your partner has to be checked. if it is on sharing basis and you are receiving the full amount and giving his share then it is a diversion of income and No TDS is applicable.

AI Summary

Proprietorship Queries on TDS, Service Tax, and Income Tax for Foreign Commission; Consider Rule 3 of Service Tax Rules. A proprietorship company in India, acting as an agent for a foreign company, receives commission for facilitating exports between countries outside India. The proprietor queries about the applicability of TDS, service tax, and income tax on the commission and the subsequent payment of 50% to a foreign partner. A consultant advises checking the Place of Provision of Services Rules for service tax and FEMA regulations for remittance. Another expert clarifies that there are no FEMA restrictions on receiving such commissions and suggests that if income is shared with a partner, it is considered a diversion of income, thus not subject to TDS.