Service tax on commission received in us dollars from abroad

This query is : Resolved

binny (Querist)
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08 August 2012 Dear Expert

Kindly advise urgently

1)Is Service tax applicable on the commission received in US Dollars by an Indian rep.compnay in India from a foreign principal company towards marketing its products to customers in India.

I think no service tax is applicable on commission earned in foreign exchange as per under Service tax circular no. 111/05/2009-ST and 141/10/2011-TRU which says that the benfits of the services by agent/rep. accrue outside India. This also gets verified under the ambit of Export of Service Rules, 2005 on which no service tax is payable if commission is in foreign currency.

2 But now With effect from 01.07.2012, is the situation changed? Rule 9 of the Place of Provision of Services Rules ( Notification 28/2012 dated 20.06.2012 effective from 01.07.2012) provides that in case of Intermediary Service Provider, place of provision of services shall be location of Service Provider. What is its implication?

Will commission earned in in Foreingn exchange still be considered as Export of services and hence no service tax on it.

Kindly confirm on above and oblige.

Thanks and Best Regards

Binny