Commission received from outside India

[DK AGGARWAL]

Sir

We are receiving commission from outside India against the order booked by us for goods supplied direct to the Indian customer by supplier.

Please inform if ST is applicable on the commission received by us as we cannot issue Invoice to the supplier charging Service Tax and also he would not like to pay.

D K Aggarwal

[Mahir S]

Sir,

From 1^st October 2014, as per Rule 9 of POP Rules 2012, the Place of provision is location of service provider. Hence it is now a taxable service.

Thus, for commission services provided by agent located in India to person located outside India for Import of Goods in India is taxable service from 1^st October 2014, which was out of purview of service tax upto 30^th September 2014.

[PAWAN KUMAR]

Dear Sir,

Reply of Mr.Naveed Ji is correct. With effect from 01.10.2014, Commission Agent of Indian Origin if receives payment from abroad, In such case service tax is payable on commission amount received as place of provision of service would be India as per the recent changes in rule 2(f) of Place of Provision of Service Rules, 2012.

[Tax Baniya]

Yes service tax is applicable on import commission from 01 October 2014.

Click here to check the detailed provision on Amendment in service tax rules

[DK AGGARWAL]

Thanks for the reply and I am now clear on the issue.

D K Aggarwal

AI Summary

Place of provision of service: commission paid from abroad to an Indian agent is taxable when provided from India. Commission received by an Indian agent from a person located abroad for import-related orders is taxable because the place of provision of service is the location of the service provider in India under the amended Place of Provision of Service Rules.