Export of Services - Commission from foreign country

[puneet virmani]

's'is an indian firm .procuring orders for a foreign company and gives list of orders to that foreign company.Further there is no dealing between 's'and the other indian firm.After recieving list that forein company deals directy with the indian company who ordered for its products. 's' recieves commission for this in US$ remitted through bank .As per export rules it seems covered under export rules --correct or not ! Explain.

[Surender Gupta]

Export of Services Rules, 2005 is applicable in your case. Your services falls under the third category in whcih the receipient of services must be located outside India. Subject to other aspect of the case, you might not be liable to pay service tax.

AI Summary

Export of services: commission earned for foreign principals may be outside service tax if recipient is located abroad. An Indian firm procuring orders for a foreign principal and receiving commission in foreign currency falls within the export of services category where the recipient of services is located outside India; subject to other conditions under the Export of Services Rules, 2005, such commission receipts may not attract service tax.