GST on payment received through Foreign Commission Agent

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Hi,

We are a services company based in India and need help with GST related queries below for Foreign Commission Agent. Your help will be highly appreciated.

CASE

M/s A (Principal - an IT Services company based in India doing Export of Services and had also signed LUT) signs Agent Agreement with M/s B (a non-resident entity/foreign company based in USA). As per agreement, M/s B's responsibility is to generate new business for M/s A in his country (USA) and also collect payment on behalf of M/s A and then deposit it to M/s A's bank account in India. M/s B is also required to remain engaged with the customers, do follow ups, provide updates etc until the order is completed.

M/s A will then pay 70% commission to M/s B for all his services, on the basis of total completed sales and payments deposited by him in M/s A account.

Q1: As we read online, M/s B must raise an invoice on behalf of M/s A to qualify the definition of FOREIGN AGENT. What does this actually mean?

The invoice created by B should be GST compliant as per Indian Laws? Or M/s B must raise invoice as per laws in his country but with M/s A's name/details on it? We are confused by the meaning of 'On behalf Of'. Please help with the format and details it should have in the above scenario.

Q3: Since B is supposed to collect payment from customers, the money will go From Customer's account in USA to M/s B's account in USA to M/s A's bank account in India. Now, the invoice created by M/s A against this payment should be on the name of End Customer or the M/s B (agent)?

Q4: We are GST Exempted - Export of services. Will we be liable to pay GST under this arrangement?

Q5: Is this a valid arrangement as per definition of Agent?

Q5: As we understand, we do not need to deduct any TDS from the commissions paid to this foreign Agent. Is this correct?

Please help. It's urgent. Thank you for your help.

AI Summary

Indian Company Seeks Clarity on GST for Foreign Commission Agent Payments: Intermediary Role and Reverse Charge Mechanism Explained A services company in India sought advice on GST implications for payments via a foreign commission agent in the USA. The agent, acting on behalf of the company, generates business and collects payments. Queries included whether the agent should issue GST-compliant invoices, GST liability, the validity of the agent arrangement, and TDS deductions. Responses clarified that the agent is an intermediary under Indian law, responsible for GST under reverse charge mechanism (RCM), and that GST exemption applies to exports. Additional questions addressed del credere agent roles, commission limits, and dual roles as agent and customer, with responses indicating these depend on contractual terms.