Service tax on export commission
This query is : Resolved
17 December 2012
What is the limit for exemption of Service Tax payable on Export Commission payable outside india
which rule / notification governs these provision?
whether any procedure / form to be submitted to department for such exemption ??
please reply
which rule / notification governs these provision?
whether any procedure / form to be submitted to department for such exemption ??
please reply
19 December 2012
Hi Ashish,
As per Rule 03 of Place of Provision of service rules,2012 location of recipient is the place of provision hence the you are liable to pay tax under reverse charge.
In case of reverse charge there is no exemption available to service recipient.
See Rule 3 of POPS Rules,Section 68(2) and Notification no. 30/2012 ST Dated 20-06-2012.
Thanks
As per Rule 03 of Place of Provision of service rules,2012 location of recipient is the place of provision hence the you are liable to pay tax under reverse charge.
In case of reverse charge there is no exemption available to service recipient.
See Rule 3 of POPS Rules,Section 68(2) and Notification no. 30/2012 ST Dated 20-06-2012.
Thanks
25 April 2013
Dear Kaushik,
Please reply me in reference to Notification No. 42 /2012 ??
Please reply me in reference to Notification No. 42 /2012 ??
24 July 2025
Regarding **service tax on export commission** paid to parties outside India, here’s a clear explanation:
---
### 1. Applicability of Service Tax on Export Commission
* When a person in India pays commission to a foreign agent or exporter located outside India for services related to export of goods or services, it is considered an **import of service** by the Indian company.
* As per **Section 68(2)** of the Finance Act, 1994, the service recipient in India is liable to pay service tax under **Reverse Charge Mechanism (RCM)** on such imported services.
---
### 2. Place of Provision of Service Rules, 2012
* **Rule 3** of the POP Rules states that the place of provision of service is the location of the service recipient.
* Since the recipient is in India, service tax is payable under RCM on the import of commission services.
---
### 3. Is there any exemption or threshold limit?
* **No exemption or threshold limit** is available for service tax payable under RCM for import of services such as export commission.
* Notification No. 30/2012-ST dated 20-06-2012 specifically states **no exemption is available** for reverse charge services.
* Earlier exemptions for export-related services were only for export of services by the Indian service provider, not for import of services.
---
### 4. Relevant Notifications / Rules
* **Notification No. 30/2012-ST (20 June 2012)** – service tax under reverse charge applicable on import of services.
* **Rule 3 of Place of Provision of Services Rules, 2012**
* **Section 68(2)** of the Finance Act, 1994
---
### 5. Procedure or Forms to be submitted
* There is **no specific exemption form or application** to be submitted for export commission paid abroad.
* The service recipient must:
* Self-assess and pay service tax under RCM on the value of commission paid.
* Disclose the details in the **Service Tax Returns (ST-3)**.
* Maintain documentary proof of payment.
* Input service credit can be claimed on the service tax paid under RCM if eligible.
---
### Summary:
| Particulars | Applicability |
| ----------------------------- | --------------------------------------------------------------- |
| Export commission paid abroad | Service tax payable under RCM |
| Exemption limit | No exemption / threshold limit |
| Governing rule | Rule 3 of POP Rules, Notification 30/2012-ST, Section 68(2) |
| Procedure | Self-assessment & payment by recipient; disclose in ST-3 return |
---
If you want, I can help you with a draft for accounting entries or return filing related to this transaction. Would you like that?
---
### 1. Applicability of Service Tax on Export Commission
* When a person in India pays commission to a foreign agent or exporter located outside India for services related to export of goods or services, it is considered an **import of service** by the Indian company.
* As per **Section 68(2)** of the Finance Act, 1994, the service recipient in India is liable to pay service tax under **Reverse Charge Mechanism (RCM)** on such imported services.
---
### 2. Place of Provision of Service Rules, 2012
* **Rule 3** of the POP Rules states that the place of provision of service is the location of the service recipient.
* Since the recipient is in India, service tax is payable under RCM on the import of commission services.
---
### 3. Is there any exemption or threshold limit?
* **No exemption or threshold limit** is available for service tax payable under RCM for import of services such as export commission.
* Notification No. 30/2012-ST dated 20-06-2012 specifically states **no exemption is available** for reverse charge services.
* Earlier exemptions for export-related services were only for export of services by the Indian service provider, not for import of services.
---
### 4. Relevant Notifications / Rules
* **Notification No. 30/2012-ST (20 June 2012)** – service tax under reverse charge applicable on import of services.
* **Rule 3 of Place of Provision of Services Rules, 2012**
* **Section 68(2)** of the Finance Act, 1994
---
### 5. Procedure or Forms to be submitted
* There is **no specific exemption form or application** to be submitted for export commission paid abroad.
* The service recipient must:
* Self-assess and pay service tax under RCM on the value of commission paid.
* Disclose the details in the **Service Tax Returns (ST-3)**.
* Maintain documentary proof of payment.
* Input service credit can be claimed on the service tax paid under RCM if eligible.
---
### Summary:
| Particulars | Applicability |
| ----------------------------- | --------------------------------------------------------------- |
| Export commission paid abroad | Service tax payable under RCM |
| Exemption limit | No exemption / threshold limit |
| Governing rule | Rule 3 of POP Rules, Notification 30/2012-ST, Section 68(2) |
| Procedure | Self-assessment & payment by recipient; disclose in ST-3 return |
---
If you want, I can help you with a draft for accounting entries or return filing related to this transaction. Would you like that?
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