Concept of service tax on intermediary service. read more a

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GAURAV JAIN (Querist)
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23 July 2015 Dear sir,
Please explain me the concept of Service Tax on Intermediary service.
when a service provider qualify as Intermediary service provider ?
For Example :- In case of import-
A importer(X) hire an Indian logistic company (Y) for import of goods from US. The Indian logistic company hire a company (Z) in US for performing all the task/job in US then Z raised it bill ( including profit share ) to Y. and then Y charge consolidated amount from X for service perform by himself in India and by Z in US after inclusion of some profit share and collect the said amount. after collection Y pay amount to Z for service perform by Z in US .
Now my question is
1. whether Y is an "Intermediary"? if yes then whether on principal to principal or principal to agent basis ? If no then Why ?
2. whether Y is require to pay Service tax under Reverse charge mechanism for imports of service ? If yes/No then why?
3. whether Y is also render a service to Z i.e. Collection service ? If yes then are y is require to charge service tax ?
4. If Y collect Rs.1000 i.e. ((210+90)+40+60)=400 (Rs.40 is profit share charged by Z in his invoice and Rs.60 is profit share charged by Y on invoice of Z)for service perform by Z in US and Rs.340+70+90+100=600 for service performed by himself in India (Rs.70 is for Freight and Rs.90 shown as reimbursement of expense and Rs.100 is profit share ).On what amount Y is require to charge service tax from X.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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23 July 2015 1 Y is an intermediary. It is principal to agent agent.
2 Y is not required to pay service tax on reverse charge as per POP rules no service tax payable on intermediary service rendered outside India.
3 Service recipient Z outside India no service tax payable.
4 Y is required to charge service tax on 260.

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GAURAV JAIN

GAURAV JAIN (Querist)
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23 July 2015 1.how Y is intermediary on principal to agent basis ?
2.As per which POPS Rule no ST is require to discharges.and is Y rendering intermediary service to any one?
3.is collection service i.e. Recovery agent not covered by Intermediary service. POPS rule-9 POPS shall be location of service provider.
4.how ST on 260.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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23 July 2015 1 Y is the agent of X hence he is intermediary.
2 Z is intermediary to Y rendering service from abroad, as per POP rules 9 (c) no service tax payable by Y under RCM.
3 No break up given for collection service it is free of cost.
4 70+90 reimbursement of expenses and 100 profit.

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