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Foreign Commission

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This query is : Resolved

Aakash Ramchandani (Querist)
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11 June 2011 We promote business of a foreign co. in india. The customers in India directly place the order on the foreign company and import the goods directly by remittance through L/C or TT. We get the difference in the foreign co's list price and the order value back by TT or get 5 commission. My query is whether we are a) liable to pay service tax on the amount thus recd. b) any income tax examption on foreign earnings?after what amount of foreign commission I am liable to income tax and what are other taxex.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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11 June 2011 If the commission receivable by you exceeds Rs 10.00 lac, then you are liable to Service Tax.

No Income Tax Exemption is available in respect of this income which has accrued and arisen in India only. You will be liable to Income Tax.

If you further like to extend your tax liability, you can do so by registering yourself for professional tax also.

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