commission

[Madhavan iyengar]

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. ??

AI Summary

Place of supply - intermediary commission treated as inter state service, attracting IGST rather than CGST/SGST.
Indian intermediary commissions from overseas clients are prima facie treated as inter State supplies attracting IGST because cross border place of supply rules point to the supplier's location when the recipient is outside India; general intra State provisions do not displace the special cross border rule. Divergent administrative guidance exists for banking services suggesting CGST+SGST, and GST valuation rules require treating received commission as inclusive of tax and applying the prescribed formula to determine the tax portion.