TDS Applicable on Foreign Payment for Commission

[Virender Singh Kang]

Dear Sir,

The agent in Qatar has got us the Order for Export from INDIA against LC at Site Payment after dispatch of Goods. We need to pay the agent the commission or fees for local support to the customer.

What is the tax implication and how can we pay the amount in US Dollar to the agen in QATAR

[JAMES PG]

TDS not applicable  on export commission paid to overseas agent as per the provisions of Section 5(2) and 9 of the Act .Service Tax @12.36% is applicable for overseas commission under reverse charge

AI Summary

TDS not applicable on export commission to overseas agents; service tax liability arises under reverse charge. Commission paid to an overseas agent for export orders is not subject to TDS because the income arises outside the domestic tax territory, while service tax is payable on such overseas commission under the reverse charge mechanism, making the recipient liable to discharge the indirect tax.