Foreign Agency Commission - Whether Service Tax Applicable?

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Sudhindra S (Querist)
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12 September 2008 Hi,

I just started a trading organization representing foreign suppliers in India. The sale happens directly between the Indian buyer and the foreign supplier. Since, we facilitate the transaction we get agency commission on each sale. This commission is directly transferred from our foreign supplier to our Bank Account.

We want to know whether there is any service tax applicable for such agency commissions??

Please note, our foreign supplier transfer payment in terms of % of the sale value and hence we cannot charge any service tax to them.

Kindly clarify?

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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13 September 2008 YES. SERVICE TAX IS APPLICABLE.

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