Impact of GST on Service Provided in Third Country

[Lokesh Kumar]

This year in the month of April I went to Belgium to attend a trade show, there I met an exporter from Cuba and introduced them to an importer in Taiwan. The Cuban exporter has started shipping cargo directly to the Taiwanese importer.

The Taiwanese importer has committed to pay us USD 2500 per consignment for introducing them to the Cuban exporter. Will there be any GST on the payment which we may receive on such transactions?

Kindly note the following:

• Exporter is from Cuba: Not in India
• Importer is from Taiwan: Not in India
• Service provided in Belgium: Not in India
• Money received: In US Dollar in India

[KASTURI SETHI]

Not taxable.

[DR.MARIAPPAN GOVINDARAJAN]

In my view it is taxable since you are having place in India and you receive the commission in India. Experts views are solicited.

[Guest]

Under the provisions of IGST, the place of supply in case of intermediary is considered to be the location of the service provider, which in your case is in India and hence taxable.

[Ganeshan Kalyani]

The service is not provided from India. The service of introducing the parties happened out of taxable territory. Only payment is being received in India. In what way it will be considered as service provided in India. I agree with Sri Kasturi Sir. It is not taxable.

[KASTURI SETHI]

Here place of Supply is outside India and not in India. Only foreign currency received in India. Definitions of place of Supply in IGST Act are at variance depending upon situation of each case. There is also no intent of Govt. to levy tax on receipt of foreign currency in India. So many factors are involved to arrive at exact place of supply.

[Lokesh Kumar]

Thank you sir

[KASTURI SETHI]

'Consideration' cannot be treated as 'Supply' and vice versa. Both have separate legal status/definitions.

[Ganeshan Kalyani]

Sri Mariappan Sir, i agree with you from an Income Tax point of view. Thanks.

AI Summary

Place of supply for intermediary services determines GST liability; provider location may make foreign commissions taxable in India. Whether GST applies to commission for introducing two foreign parties depends on IGST place of supply rules and intermediary characterisation. One view treats intermediary services as supplied at the provider's location, making receipt in India taxable; another view holds the service occurred outside India and mere receipt of foreign currency in India does not create taxable supply. The legal distinction between consideration and supply is emphasised, and resolution requires applying IGST place of supply provisions to the specific facts.