Intermediary Service provided to a Foreign client for supply of goods outside the taxable terrotory of India

[Vinay Kunte]

Intermediary Service provided to a Foreign client for supply of goods to a Foreign client by the Provider of Service located in Taxable territory of India

As per the amendment to Rule 2 and effectively Rule 9 (c) of PPS Rules 2012, the Income from Intermediary Service for supply of goods (Commission) is taxable w.e.f. 1st Oct. 2014.
If the supply of the goods is affected by a foreign client of the intermediary located in India to a Customer outside the taxable territory of India, will the service be taxable even though the recipient of Service is outside the Taxable Territory of India and the Supply of Goods is done to the third party Customer outside the taxable territory of India?
Can anybody give a factual explanation on the Taxability of the subject Intermediary Service?

AI Summary

Intermediary Services in India Taxable Under Rule 9, Regardless of International Supply, Effective October 1, 2014. A discussion on a forum addresses the taxability of intermediary services provided by an Indian service provider for the supply of goods to a foreign client. The query concerns whether such services are taxable when the goods are supplied outside India's taxable territory. An expert clarifies that under Rule 9 of the Place of Provision of Service Rules, the location of the service provider determines the tax liability. An amendment effective from October 1, 2014, specifies that intermediaries in India must pay service tax, regardless of whether the goods are supplied domestically or internationally. Other participants agree with this interpretation.