Commission Received from Foreign Company Taxable under GST Act

[Harendra Singh]

Respected Member.

Good Afternoon!

I have received commission from Exedia.com & Booking .com both company are foreign.

Now my question is.. How to pay GST (IGST) on that commission. You aware they have not paid to us GST.

Suppose I received ₹ 10000 Commission received from them (without GST).

1. Can I pay IGST @18% from my pocket (10000* @18%=1800).

Or

2. exclude 18% from this commission amount and paid Govt (8475*.@18%=1525).

Can I obtain RCM on this case. (First I pay & then claim input (Reverse Charge).

Kindly advise to me on urgent basis.

Thanks & Regards,

Harendra Singh

[Rajagopalan Ranganathan]

Sir,

Please indicate for what purpose you are receiving commission from a foreign company? What is the nature of service provided by you?

[Harendra Singh]

Dear Sir,

I am a travel agent & I have booked hotels from their online portals for my customers. In respect they have paid me commission direct in my account.

[Himansu Sekhar]

You acted as an intermediary. Tax is payable om 1000. It will be treated as cum tax value.

[Alkesh Jani]

Sir,

In my point of view, the amount received by you is inclusive of Tax, therefore, Rule 35 of CGST Act, is applicable and you may pay tax as per formula given i.e.

Tax amount = (Value inclusive of taxes X tax rate in % of IGST or, as the case may be, CGST, SGST or UTGST) ÷ (100+ sum of tax rates, as applicable, in %)
Thanks

[Himansu Sekhar]

I make a correction. It will not be treated as cum tax value. It is available as itc. Under such circumstances there is need to collect the tax. The benefit of paying the tax is available as itc. You are not a service provider

[KASTURI SETHI]

I agree with the reply at serial no.5 dated 1.11.19 above.

AI Summary

GST on commission: intermediary agents must collect and remit IGST on commissions, with ITC implications under GST rules. A travel agent acting as an intermediary must discharge GST on commission earned from foreign online booking platforms; while one view suggested computing tax on an inclusive/cum-tax basis under Rule 35, a correction stated the commission should not be treated as cum-tax value but tax must be collected and remitted on the commission, IGST applies in the cross-border context, and tax paid may be available as input tax credit where permitted.