Way to claim exemption of Not.18/2009 - S.T. on foreign commission paid to overseas agents

[JOSHIL JAIN]

Dear Sir,

Exporters can claim Exemption of Notification No. 18/2009-ST. on foreign commission paid to overseas agents. 'One of condition of availing said expemption is that you should attach acutal payment proof of commision to commission agent.' Now Please advise we have to file return upto 15th April 2010 for the half year ended 31st March 2010. Then whether we have to pay commission amount to commission agent even if some invoices are pending realisation to avail expemtion or there is any other way to claim exemption without payment of commission to commission agent.( That will be paid in future after realisation of bills perataing to invoices shipped before 31st March 2010.) Please advise. Joshil Jain

[Baalu Radhakrishna]

In terms of condition 4 (i) of the Notification you require to file a proof of payment of commission. Service tax is payable only after service charges(commission amount) is paid. During the month of March there will be obviously some pending bills. So while filing EXP I / EXP you limit the details only to the bills where commission amount has been paid bills. The balance can be carryforward to the next return.

AI Summary

Exemption for foreign commission requires proof of actual payment; include only paid commissions in current return. Exemption under Notification No.18/2009-ST for foreign commission requires proof of actual payment of the commission; service tax is payable only after the commission is paid. While filing the EXP I/EXP return, include only bills for which commission has been paid and proof can be attached; unpaid commissions may be carried forward to the next return until payment is made and evidenced.