INTERNATIONAL TRADE BROKER

[Siddharth Mundra]

Hello Sir/Mam,

I am a trade broker, please help me to understand if i have any gst/igst liability. The buyer is based in dubai for the commodity, The seller is based in germany for the commodity. I get commission monthly and it’s a 12 months contract since I acted as an intermediary in the trade. I will receive money as foreign inward remittance. Do I have to pay IGST on the amount received? Why? neither the buyer, nor the seller is from india. How much Igst i have to pay?

[KASTURI SETHI]

No GST is applicable for sale/supply of goods from one non-taxable territory (Germany) to an other non-taxable territory (Dubai) . Your case is different. In your case, you are supplying intermediary services from taxable territory (India) to non-taxable territory (Foreign Country). You do not qualify as export of service. Your service is covered under Section 13 (8) (b) of IGST Act. The place of supply is the location of the supplier of service. Hence taxable and IGST is applicable. Rate is 18% of the amount of brokerage received. Also see the definition of "Intermediary" under Section 2(13) of IGST Act. Case law/decision of AAR/AAAR can be easily traced out to this effect..

AI Summary

Place of supply rule for intermediary services: supplier's location makes brokerage commission taxable under GST.
Intermediary commission received by an Indian-based broker for arranging trade between foreign buyer and seller is treated as intermediary services supplied from the taxable territory; the place of supply is the supplier's location, so the supply is not an export of services and is taxable with IGST applicable. The position relies on the definition of intermediary and the place-of-supply rule for intermediary services.