Service tax on commission received in us dollars from abroad
This query is : Resolved
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
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
Amol S Joglekar
(Expert)
08 August 2012
Rule 9 of place of provision of service makes it taxable with effect from 1/7/2012.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Depreciation Chart Companies Act
- EPF ECR NEW FILE SEP 17TH 2026
- Capital Gail Exemption Certificate
- Oct 2025 Invoices
- Import of Software Service.
- SECTION 393(3) TAX ON CASH WITHDRAWAL
- Clarification Requested: Gift → NRO → NRE → Overseas Transfer - USA/CANDA (FEMA & Tax Compliance)
- Under marginal scheme
- Capitalgain tax purposes for valuation report compulsory
- GST on Renting godown to KFCSC for Storage of Raagi
- GST Audit whether Govt Companies are exempt?
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
