Cenvat Credit of Service Tax paid on Commission to Foreign Agents

[dharmendra more]

Dear Experts,

We are a manufacturer of PVC films. We are paying commission to overseas agents on our exports. Excise Department has issued us notice for demand of service tax on commission paid to overseas agents.Can anyone clarify us on below mentioned queries :

 1. Commission paid to overseas agents attracts service tax ?

 

2. Service tax paid on commission to overseas agents can be taken as cenvat credit to pay excise duty and/or service tax on output services. If yes any notification available. 

 

3. Any exemption available on payment of service tax on commission paid to overseas agents.If yes any notification available.

 

Kindly guide us.

AI Summary

Reverse charge on overseas agent commission: service tax liability with limited exemption and refund routes under export rules.
Commission paid to overseas agents is taxable under the Reverse Charge Mechanism and export-of-service rules; treatment of Cenvat credit is disputed-some authorities advise only refund under export rules while others classify such commission as an Input Service eligible for Cenvat credit rather than an output service. Export-related exemption procedures and prescribed form-based filings are indicated as the available procedural routes for relief.