GST ON EXPORT COMMISSION

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This discussion clarifies that GST is generally not applicable to commission paid to overseas agents for securing export business. Such services are treated as zero-rated export services. Furthermore, GST is typically not required under the reverse charge mechanism (RCM) when the supplier is outside India, the recipient is in India, and the place of supply is also outside India, as the services are consumed abroad. While a ruling supports this, clarity from the GST council is recommended to prevent potential departmental demands.

afreen shaikh

afreen shaikh (Querist)

19 November 2024 WE ARE PAYING COMMISSION TO PERSON ABROAD FOR GETTING US BUSINESS(EXPORT ).

IF WE RAISE INVOICE OF COMMISSION SHOULD WE CHARGE GST ?? IS GST APPLICABLE??

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

19 November 2024 GST is not applicable on export-related commission paid to an overseas agent; it is treated as a zero-rated export service.

afreen shaikh

afreen shaikh (Querist)

19 November 2024 THANKK YOU SO MUCH SIR..............IS RCM APPLICABLE?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

19 November 2024 GST is not required to be paid under reverse charge where the supplier is outside India, recipient is in India and place of supply is outside India as the goods/services are said to be consumed outside India. Refer the case of Dry Blend Foods Pvt Ltd [Ruling No. 01/2022-23 dated 1 April 2022], the Uttarakhand AAR held that the applicant is not required to pay GST on reverse charge mechanism on commission paid to the agent, since services consumed outside India.
However, demands may be raised by the departmental officers. Hence, the GST council should come up with a circular providing clarity on this issue to avoid unnecessary demands and increasing the burden on the judiciary system.

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