Commission Income from Foreign entity for arranging business

[Balakrishnan Ramalingam]

My client have received Commission in US$ for arranging business connection between two parties both in foreign. Subsisting agreement available with the supplier of goods (foreigner). Pl advise on applicability of GST on above transaction. Also Which GST ? IGST or SGST/CGST?

Thanks

[CASusheel Gupta]

It shall fall under definition of intermediary services and POS shall be location of supplier u/s 13(8) i.e. Inida, hence subject to GST.

Need to charge IGST as per section 7(5)(c) of IGST Act. (Other opinions also required)

CA Susheel Gupta

9811004443

[KASTURI SETHI]

IGST is payable. I support the views of Sh.Sushil Gupta, C.A.

[Balakrishnan Ramalingam]

Thanks sirs,

But can we claim the same of Export of Service and claim 'zero rated tax' by giving LUT or alternatively pay IGST and claim refund?

[KESHAV GROVER]

Sir,

The reply given by the above two learned experts is absolutely correct.Please go throght the definition of the intermidiary as given in the IGST Act and take decision.

[KASTURI SETHI]

With reference to query no.3 dated 16.3.19 of the querist, here is the decision of AAR:

2019 (20) G.S.T.L. 494 (A.A.R. - GST) = 2018 (12) TMI 227 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRAIN RE : VISHAKHAR PRASHANT BHAVE

[Balakrishnan Ramalingam]

Thank you sir

[CASusheel Gupta]

Thanks Sir

AI Summary

Intermediary services treated as taxable with IGST when supplier is located in India; export zero rating or refund options queried. Commission earned in foreign currency for arranging business between two foreign parties is characterized as intermediary services with the place of supply at the supplier in India, rendering the supply taxable and attracting IGST. The querist asks whether the service qualifies as export for zero-rating via a Letter of Undertaking or whether IGST may be paid and later refunded; respondents point to the statutory intermediary definition and an AAR decision for guidance.