GST on Commission from foreign co
April 20th, 2023 asked by Keyur
Dear Sir, Can Indian Company "A Ltd" consider the commission received from foreign Company "B Ltd" for promoting their business in the Indian market as an export service? 2) Service .Tax Dept. has disallowed the export service claimed by A Ltd stating that commission paid for promoting business in the Indian market, therefore services rendered in India. Whether Dept. is correct? Your opinion, any case law?
By admin | April 20th, 2023
Expert Answer
By admin | April 20th, 2023
Commission normally indicates that it is intermediary services. As per Service Tax intermediary services are services provided for facilitating goods or service between two or more person. if your service falls under intermediary service, place of provision of service shall be the place of service provider i.e. A Ltd which is India and hence service tax shall be levied. However if only marketing services A Ltd was not acting as intermediary between persons, it can be considered as export. a case law similar to your case is CSG Systems International (India) (P.) Ltd. v. Commissioner of Central Tax, Bengaluru. [2021] 126 taxmann.com 139 (Bangalore – CESTAT).