Commission Remitted in US Doller to foreign Agent

[SURYAKANT MITHBAVKAR]

We have Paid Service Tax on commission remitted to foreign Agent in US doller . Regarding taking credit if the particular Export Consignment is on FOB Basis can we take the service tax credit on Service tax paid on Commission remitted to Foreign Agent.

[Snehal Kulkarni]

Notification NO 41/2007-ST, provides you the exemption or refund of service tax paid on the specified services used for export. You can either

1.     Claim for Refund of Service Tax paid subject to fulfillment of the conditions laid down under Notification No 17/2008-Service Tax dated 01.04.2008,

2.     You can avail the Cenvat Credit based on the TR-6 Challan

3.     You can avail the exemption from the payment of Service Tax as per the conditions laid down under notification No 17/2009-ST dated 07.07.2009, where you have to file the half yearly return.

AI Summary

Service tax credit on commission to foreign agents: refund, cenvat credit, or exemption available with compliance. Service tax paid on commission remitted in foreign currency to a foreign agent for export consignments on FOB terms may be reclaimed either by claiming a refund for specified services used for export under the export relief framework, by availing Cenvat Credit based on payment via the prescribed challan, or by claiming exemption under notification based conditions that require filing periodic (half yearly) returns and compliance with procedural requirements.