Applicability - Foreign Commission - Refund Claim

[satbir singhwahi]

regarding service tax on foreign agent commission,whether applicable from 16.06.2005 only or prior also ,as dept is asking from 09.07.2004.. Further whether this service tax can be refunded if the unit is exporting goods and not registered with excise dept. Any other way to claim refund may be guided.

[Surender Gupta]

Commission paid to foreign commission agent became taxable by inserting explanation to Section 65(105). However this provision has been challanged before the Madras High Court. Legislature has also removed this explanation by Finance Act, 2006. Therefore, you may wait and watch the development.

AI Summary

Taxability of foreign agent commission affected by statutory explanation removal; taxpayers should monitor legal developments. The issue concerns taxability of commission paid to foreign commission agents: an explanatory clause to Section 65(105) had treated such commissions as taxable services, that explanation was judicially challenged, and the legislature later removed the explanatory clause, creating uncertainty regarding liability and refund claims for taxpayers including exporters not registered with excise.