Comission from Indian Main agent to foreign subagents

[Priya Rajarajan]

We are explaining our nature of activity in brief for your kind advice.

1. In our case seller of goods and purchaser of goods both are situated outside India. We help them to close deal and getting commission for trading of such goods.
2. We provide service to the client situated abroad as mentioned above and getting commission in convertible foreign exchange.
3. This transaction is not Import as goods are not arriving in India.
4. Our service consumed outside India and by nature it is pure export of service.

5.I'm a commission agent and I in turn need to pay to 3 of foreign sub agents.(2 million usd/month per agent)

6.What is the max amount that could be paid to foreign sub agents.

7.What is the procedure and the documents required to provide the bank?

8.Whether the commission paid to foreign sub agent is taxable

AI Summary

Service Tax Implications on Indian Commission Agents: Impact of 2014-2015 Rule Changes and Foreign Sub-Agent Payments An Indian commission agent facilitates deals between foreign buyers and sellers, earning commissions in foreign currency. The agent queries about the maximum amount payable to foreign sub-agents and the tax implications. Responses indicate that service tax applies to commissions from foreign parties, despite services being consumed outside India. Amendments to service tax rules and exemptions, particularly after changes in 2014 and 2015, affect the taxability. If the commission exceeds 10% of the FOB value, service tax applies to the excess. However, recent changes suggest that service tax may not apply to commission agent services provided outside India.