TaxTMI 
TaxTMI 
we are exporter and we have one agent who is booking order for us on commiission basis he is in dubai now we want to pay him commission .kindly inform us service tax and tds is liable on above commission and how we can take rebate
Tds and service tax liability on commission paid
26 Dec 2008 
4 Replies 
4837 Views Asked by
Import of services liability: commission to foreign agent attracts service tax, payable first then claimable under export refund rules.
Commission to a foreign agent is treated as import of services and attracts service tax; the exporter should discharge service tax at payment and then claim refund or rebate under the export-related notification or the Export of Services Rules, depending on whether the export is goods or services. On TDS, advisory opinions conflict: one view requires deduction of TDS on the taxable commission payment, while a referenced income-tax circular indicates no TDS is deductible on commission paid to a foreign commission agent. (AI Summary)
Commission to a foreign agent is treated as import of services and attracts service tax; the exporter should discharge service tax at payment and then claim refund or rebate under the export-related notification or the Export of Services Rules, depending on whether the export is goods or services. On TDS, advisory opinions conflict: one view requires deduction of TDS on the taxable commission payment, while a referenced income-tax circular indicates no TDS is deductible on commission paid to a foreign commission agent. (AI Summary)