Live Course on Drafting of Appeal and Reply of Penalty Notice by CA Sachin Sinha. Register Now!!

Receipt of Foreign Commission

RAJESH ACHARYA (Accounts Executive) (23 Points)

27 September 2017

Is it called as export service??

Reply
Follow
Share

5 Replies

Ahmed Ali (388 Points)
Replied 27 September 2017

There are 5 conditions to qualify as Export of Service according to Sec 2(6):

(i) the supplier of service is located in India;
(Here you are the supplier and you are located in India, so this condition is satisfied)

(ii) the recipient of service is located outside India;
(Now you have to ensure that the person to whom you are providing service should be located outside India)

(iii) the place of supply of service is outside India;
("Place of Supply" needs to be determined which depends on case to case basis. So, you have to provide me more details about what type of service you provide)

(iv) the payment for such service has been received by the supplier of service in convertible foreign exchange;
(If you received your income in foreign currency, then you have satisfied this condition)

(v) the supplier of service and the recipient of service are not merely establishments of a distinct person
(If you and your recipient of service are two distinct entities then you have satisfied this condition)

RAJESH ACHARYA (Accounts Executive) (23 Points)
Replied 27 September 2017

We are indenting agents for China's supplier. They supply the material to Indian company on our indent. Indian company making payments directly to Supplier as per terms of our indent. After getting payment from material Recipient, they release our commission as per terms.

Ahmed Ali (388 Points)
Replied 27 September 2017

That means you are an intermediary as defined in Sec 2(13). Place of Supply for an intermediary as per Sec 13(8) is Location of Supplier of service i.e. India.

So, 3rd condition of Export is not satisfied. But please again clarify with your nearby GST Seva Kendra.