Commission to Foreing Agent

[JAGANATHAN KUMARAVEL]

Please let me know the current provisions relating to the service tax liability on commission paid to an agent abroad for procuring orders to be exported from India. (Garment Industry)

[kothapally Raji Reddy]

Dear Mr Jaganathanji

Please see notification no. 18/2009-ST dt 7.7.2009. Commission paid to an agent abroad(BAS)  is exempted from payment of service subject to the fulfilment of conditions mentioned in the notification. Otherwise, you are liable to pay service tax under Section 66A of the Finance Act

[P Ovhal]

i am agree with above

You are liable to pay service tax under Section 66A of the Finance Act on BAS, But you are able to avail exemption under notification No 18/2009-st on sales commission paid to Agent.(when commission paid after Export; not in advance)

please refer notification 18/2009-st

AI Summary

Service tax on commission to foreign agents: exemption possible under notification, otherwise taxable under statutory service tax provisions.
Service tax applies to commission paid to an agent abroad as a taxable business auxiliary service unless an exemption under a specified notification is available; that exemption commonly requires that commission be paid after export rather than in advance and compliance with the notification's conditions.