Commission from foreign company - Service tax applicability

[Guest]

Basically commission is taxable under Business Auxiliary Services. (i) One export order received by the X, Person outside India , from China to Africa . The company gets commission in foreign currency from X, for arranging the order. (ii) For identifying the party, Company pays commission to Y in foreign currency. Whether (i) comes under Export of Services and no Service tax applicable? Whether (ii) comes under Import of Services and Service tax is applicable under reverse method ? Thanks

[Guest]

As per our understanding this service is neither export nor import. This service is not taxable in India. However, details analysis of facts and circumstances may give some different results.

AI Summary

Business auxiliary services: commission for arranging foreign orders treated neither export nor import, generally not taxable in India. Whether commission for procuring an overseas order and commission paid to an overseas intermediary fall within Business Auxiliary Services as Export Of Services or Import Of Services is queried. The advisory view is that, on the stated facts, the service is neither export nor import and is not taxable in India, but a detailed, fact specific analysis may alter that conclusion.