Liability of service tax under reverse charge

[Sanjeev Sharma]

An Indian Company subscribes to a foreign journal ( e journal)in electronic mode through an indian Agent. It receives password direct from foreign publisher and through which it can access and download the E journal. Payments are made to agent in INR. Agent, in turn, remits the payment to foreign publisher in foreign currency after deducting and retaining his commission. Query : 1. Is Indian company or agent liable for service tax under reverse charge under import of taxable services under Online database access or Retrieval Or Information Technology or under any other taxable Services ?? who will be liable ? 2.Is agent covered under Export of services for his commission income ?

[Mukesh Kumar]

The activity in question appears to be in the nature of import of service and liable to service tax. However, you have to decide that you is the receiver of inormation from abroad. The Company, The agent on his own behlaf or The agent on behlaf of the company. In first and third situation, the comapany is liable for service tax. On the other side, the agent is liable for service tax. The amount received by the agent as commission, can not be treated as export since he is acting on behlaf of the Indian Party and getting the commission in INR.

AI Summary

Indian Company Liable for Service Tax on Foreign E-Journal Subscription Under Reverse Charge; Agent's Commission Exempt An Indian company subscribes to a foreign e-journal through an Indian agent, who remits payment to the foreign publisher after deducting his commission. The query concerns whether the Indian company or the agent is liable for service tax under reverse charge for importing taxable services. The response suggests that the activity is likely an import of service, making the company liable for service tax if it is the recipient of the information. The agent's commission income is not considered an export of services, as it is received in INR on behalf of the Indian party.