Commission received on sales of goods of foreign dealers

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Asad Quadri (Querist)
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06 January 2015 Sir,

My Delhi based client engaged in the business of sale of goods supplied by a Foreign Company. The Foreign company does not have any business establishment in India.My client receives order from buyers in India and forward to the foreign company. The foreign company directly supply the goods to buyers in India and received payment from them directly. My client receives order and forward it to the Foreign company and in returns get commission. The foreign company transfers the amount to my client's account.
My question is-

1) Whether service tax is applicable in such transactions?
2) Whether DVAT is applicable in such transactions?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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06 January 2015 1. Yes service tax applicable on the commission received, if it exceeds 10 lakhs in the first year and thereafter for the full amount.
2. DVAT not applicable on direct sale from abroad.

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