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 service location determines taxability: intermediaries in India attract service tax even for overseas supplies.
The amended Place of Provision of Service Rules extend the definition of intermediary to persons who arrange or facilitate services or supplies of goods. The decisive factor is the location of the service provider: intermediaries located in India are liable to service tax on commission for arranging supplies even when the recipient and the goods' supply are outside India; intermediaries located outside India providing services from abroad are not liable and reverse charge does not apply.