Taxability of commission received from foreign company

[Asked by Guest]

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

Service tax on cross-border commissions may apply unless characterised as export of services delivered and used outside India.
Taxability hinges on whether commission for procuring orders in India is classifiable as Business Auxiliary Services-generally taxable-or as an export of services delivered and used outside India. Departments commonly issue show-cause notices to recover tax on foreign-exchange commissions; taxpayers may argue delivery outside India and challenge liability on appeal.