TaxTMI 
TaxTMI 
Dear Sir, One of my client is paying commission to agents of foreign buyers. These agents are based in foreign. Their offices are not situated in India. Now as there is amendment in Export of service rules 2005 w.e.f. 1st March 2007, " substitute the words 'delivered outside India and used outside India' with the words 'provided from India and used outside India ' whether service tax is applicable to my client. Whether now he has to deposit service tax on the commission paid to these foreign agents. Commission to these agents are paid in foreign currency. Please Advise.
Applicability of service tax - commission paid in foreign currency
12 Apr 2007 
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Import of services liability: recipient must pay service tax when foreign providers supply services to an Indian recipient.
Where services are provided by a service provider situated outside India to a recipient based in India, the payment is treated as import of service and taxable on the recipient, who must obtain service tax registration and discharge tax on imported taxable services; an exemption exists for services received and consumed in India by an individual not in the course of commerce or business. (AI Summary)
Where services are provided by a service provider situated outside India to a recipient based in India, the payment is treated as import of service and taxable on the recipient, who must obtain service tax registration and discharge tax on imported taxable services; an exemption exists for services received and consumed in India by an individual not in the course of commerce or business. (AI Summary)