X based in Maharahstra India has a GST regn X helps in procurement of orders for its overseas clients based in US and Germany X receives commission from the clients in US and Germany for the procurement of orders. Thus X is acting as intermediary and accordingly based on POPS the location is Maharashtra state.
In the above case X will raise invoice fro commission on the overseas clienst ,
Issues: X should discharge which tax IGST or CGST/SGST and can it treat the amount of commission received as inclusive or it has to calculate the tax on the amount received. ??
IGST Applies to Commissions for Indian Company Acting as Intermediary for Overseas Clients, Says Maharashtra AAR Ruling A discussion on a forum focused on the tax implications for a company in Maharashtra, India, acting as an intermediary for overseas clients in the US and Germany, receiving commissions. The main issue was whether the company should pay IGST or CGST/SGST on the commission received. The consensus, supported by detailed analysis and a Maharashtra AAR ruling, concluded that IGST applies as the services are considered inter-state, not intra-state. The commission should be treated as inclusive of tax, and the valuation rules should be applied to determine the tax portion. There was mention of divergent views, particularly in banking services, but the primary conclusion remained IGST applicability. (AI Summary)
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