Taxability of commission received from foreign company

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A pvt ltd company received commission in foreign exchange from foreign principals. Does it attract service tax. 1. The foreign principal has no office in India. 2. The agent has no authority to sign any contract on behalf of the foreign principal.

AI Summary

Debate on Service Tax for Foreign Exchange Commission in India: Is it Business Auxiliary Service or Export? A private limited company in India received commission in foreign exchange from a foreign principal without an office in India. The query concerns whether this commission is subject to service tax. One response suggests that the commission falls under 'Business Auxiliary Services' and is taxable, as the service is not considered an export. However, it may be argued that the service is partly delivered outside India, potentially leading to a different outcome at the Tribunal level. Another response suggests that the service might qualify as an export, as it is used outside India, with tax liability potentially starting from April 19, 2006.