GST applicability on marketing fees paid consultants abroad

[Raam Srinivasan Swaminathan Kalpathi]

The client is an internaltional freight forwarder (plus provides related logistics services).  Marketing fees is paid (fixed component +  one time bonus depending on the leads generated by the consultant) to a Consultant outside India.  Request the experts to elucidate on the applicability of GST (pre and post Sept 22, 2025).  Will the supply be considered as 'intermediary services'.  Thanks

[KASTURI SETHI]

                         Answer is NO.

                              Freight Forwarder and Freight Forwarding Agent (Intermediary) are different terms    

                            The meaning of the terms, ‘Freight Forwarder’ and  ‘Forwarding Agent’  in different dictionaries  and  in the dictionary                                of Halsbury’s law of   England have been discussed by Hon’ble Tribunal  in the case of  Mahavir                                                                  Generics Vs.  CCE, Bangalore reported as   2006(3)STR.276(Tri-Delhi)

AI Summary

GST on marketing fees paid to overseas consultants: export classification, intermediary characterisation and pre/post Sept 22, 2025 impact GST treatment turns on place of supply, location/status of supplier and recipient, and characterization of the consultant's role. If the consultant is non-resident, the supplier is in India, the recipient is located outside India, and consideration is received in convertible foreign exchange, the service may qualify as export of services and be zero-rated; this is the operative effect. If the consultant is an intermediary (facilitating a supply between two distinct parties), place-of-supply rules for intermediaries could alter taxability and reverse charge consequences, thereby changing that operability. The post-22 Sept 2025 rule changes may affect characterisation and invoicing requirements and should be checked for compliance.