'A' COMPANY IN SRILANKA SUPPLIES MACHINERY TO 'B' COMPANY IN JAPAN. MY CILENT IN INDIA 'C' GETS THE COMMISSION FROM 'A' COMPANY FOR PROCURING ORDER FROM 'B' COMPANY.
BOTH THE SUPPLIER AND THE BUYER OF THE MACHINERY ARE LOCATED OUTSIDE INDIA. WHETHER COMMISSION RECEIVED IN INDIA BY 'C' IS TAXABLE AS PER NEW POP RULES.
Indian Intermediary's Commission Taxable Under Rule 9 of POP Rules 2012, Despite Export Service Exemption Debate. A company in Sri Lanka supplies machinery to a company in Japan, with an Indian intermediary receiving a commission for facilitating the order. The query concerns whether this commission is taxable under the new Place of Provision (POP) Rules. According to Rule 9 of the POP Rules, 2012, the place of provision for intermediary services is the location of the service provider. Since the intermediary, located in India, provides the service, they are liable for service tax. However, a contrasting view suggests that the commission might be exempt as an export of service. (AI Summary)
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