GST APPLICABILITY

[SAFETAB LIFESCIENCE]

Hi dear experts,

We are commission agent in Tamil Nadu. We are taking orders for machineries from Indian companies of various states and forwarding to foreign suppliers. Our suppliers are invoicing directly in the name of our customers in India. After all transactions were over, our foreign principals will give us commission about 2 to 3 % of the transaction value. Commission are being received by us in USD or other foreign currencies.

Whether we have to pay GST for the commissions received from foreign principals/suppliers in foreign currencies. If so what is the rate. In our GSTR-1, whose GST details to be given as our buyer. We are not selling anything. Pls clarify.

[SIVARAMA KUMAR]

Since you act as an intermediary for the foreign company, and you being the supplier of services to the Indian companies the place of supply, and location of supplier both originate in India you are liable to pay cgst and sgst at the rate of 9% each.

The commission could be shown in GSTR-1 under B2C others or B2C large depending upon the volume of commission earned in INR.

[SAFETAB LIFESCIENCE]

Thank you for sharing the feed back/ clarification w.r.t GST on foreign sales commission.

once again , would like to specify the details of the business deal;

1) supplier(principal) is in foreign origin( swiss/ china etc)

2) we work as an agent for them to sell their capital machinery ( textile) to indian customers

3) invoice & other delivery related shipping documents etc directly from supplier to end user( customer) ..payment sent by customer to supplier directly.

4) errection commissioning carried out by principals service team under separate contract.

5) principal ( supplier ) pay the sales commission to us in Foreign currency through bank accout after the deal is over

now, pl clarify , whether GST is applicable on this foreign sales commission income .( anyway we are paying income tax on this income)

[SIVARAMA KUMAR]

I Couldn't get your point clearly. As an agent your income accrues in India out of your location and Recipient location ( Place of supply is the essential crux under GST. You are liable to pay both GST and Income tax for the income earned. Do you invoice your supplier for the commission earned , or will it be made without any invoice based on mutual agreement.

[KASTURI SETHI]

Undoubtedly GST is applicable.

AI Summary

GST on foreign commission treated as domestic supply; CGST and SGST apply, report in GST return accordingly. Commission earned by an Indian agent from foreign principals for sales to Indian customers is a taxable service with place of supply in India; the agent must pay CGST and SGST on those commissions even if received in foreign currency, and report the outward supply in GSTR-1 under the appropriate B2C category. The agent is also subject to income tax and should ensure proper invoicing and registration for GST compliance.