Service tax applicability on commission paid abroad

[pardeep bisht]

please confirm if service tax is applicable on commisions paid to parties whoes office are not in in India.

[Mukesh Kumar]

Yes, it is treated as Import of Service. But as per new scheme of service tax, if the same is used for export of service, you may claim exemption directly. See notification no. 18/2009

AI Summary

Import of service: cross border commission payments are taxable unless exempt as used for export of service. Commission paid to a party outside India is treated as an import of service and attracts service tax; however, where such imported service is used to provide services qualifying as export of service, an exemption can be claimed under the applicable notification (notification no. 18/2009).