Which tax to be charged under GST

[THYAGARAJAN KALYANASUNDARAM]

Dear Experts,

One of my client located in Tamil nadu and procuring orders within India to overseas client for supply of goods. Since the provision of service terminated in india, we are liable to charge GST based on the place of provision of service under earlier regime. We are procuring orders from tamilnadu as well as outside tamilnadu and the commission billing only to overseas customers. Now my query is whether to charge CGST & SGST or IGST for all the commission received from overseas irrespective of the location. Whether this levy based on the procurement of orders or our customers located in outside india.

Thanks in Advance.

[Rajagopalan Ranganathan]

Sir,

If your client is merely procuring orders for supply of goods and goods are supplied to overseas client directly by Indian supplier then it is export of goods. This can be done wither on payment of IGST or under bond/LUT without payment of IGST.

If your client himself procure the goods and then export the same to overseas client on his account then the supplier will charge CGST and SGST if it is intra-state transaction or IGST if it is inter-state transaction.

[Ashok Chopra]

Since you client is procuring orders in India for an overseas client and raising his commission bills to his the overseas client, he is rendering his services to a foreign party and will fall under the category of export of services. Under GST Exports of Goods and Services are Zero rated. Hence your client can raise bill either without GST and claim refund of GST paid on input , input services and capital goods related to such export of services or pay IGST at an applicable rate and claim refund of this IGST.

[DR.MARIAPPAN GOVINDARAJAN]

I endorse the views of Shri Ranganathan

[THYAGARAJAN KALYANASUNDARAM]

Dear Shri. Ranganathan Sir,

We do only getting orders from Indian customers on behalf of foreign suppliers. Here is that, the goods will be imported into India not export from India by the customers. This orders will be routed through us. As per my understanding even under service tax regime, the providing of services terminated in India we are held liable to pay service tax on the commission received from abroad. Whereas under GST regime my query is that whether we have to charge on the invoice to abroad customers as IGST or CGST & SGST irrespective of the customers of abroad suppliers located in India.

Thanks in Advance.

AI Summary

Export of services zero-rated - commission for procuring orders can be invoiced under LUT or with IGST and refund. Commission for procuring orders for foreign principals is treated as export of services and is zero rated; invoices may be raised under bond/LUT without GST and input tax credits claimed, or IGST may be paid and subsequently refunded. If the intermediary procures and supplies goods on his own account within India, intra state transactions attract CGST and SGST and inter state transactions attract IGST; where goods are imported into India the place of supply analysis determines whether CGST/SGST or IGST applies.