TaxTMI 
TaxTMI 
Taxability of commission received from foreign company
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....axability of commission received from foreign company<br> Query (Issue) Started By: - ajay Dated:- 19-2-2007 Last Reply Date:- 21-2-2007 Service Tax<br>Got 2 Replies<br>Service Tax<br>A pvt ltd company received commission in foreign exchange from foreign principals. Does it attract service tax. 1. The foreign principal has no office in India. 2. The agent has no authority to sign any contract on b....
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....ehalf of the foreign principal. Reply By S. Gokarnesan: The Reply: Dear Sri Ajay, You have not clearly mentioned the nature of service rendered by you to get commission in foreign currency from your principals. Normally, Foreign Company appoints agents in India to procure Orders from Indian buyers for which the foreign company pays commission to the Indian Agent. In such a situation, the servic....
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....es are covered under the scope of 'Business Auxilliary Services' and service tax is payable on the commission as the exemption is available only for export of services. The Department will not treat this activity as 'export services'. However, you may contest the issue on the ground that the services are rendered partly in India and delivered partly in foreign country. i.e. the activity of procur....
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....ing the orders is a part of services rendered in India and forwarding the same to the foreign client for execution of the order is to be considered as 'Partly delivered outside India'. Only on sending the details of orders procured to the foreign client , the service is fully completed. However, you may not succeed in the Adjudication by the Division level but you may succeed in Tribunal. Advis....
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....ed accordingly s. gokarnesan Reply By Madhukar N Hiregange: The Reply: The service could be considered to be an export of servcies as the service is delivered outside India used outside India to convert inot an order, amount received in CFE and the recipeint is outside India. The BAS category specifies that where the recipient is outside India the same would be a export. Department however has bee....
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....n raising SCN to recover such amounts recived. Even it were to be paid the liability in my view is only from 19.4.2006 and not earlier.<br> Discussion Forum - Knowledge Sharing ....