St on commission income

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This query is : Resolved

Gunjan Tulsyan (Querist)

21 June 2012 I have a client who has the business of providing services in the form of getting clients for his parent company which is in Europe which is into the business of weilding so my client provides customers which are situated in India as well as outside India and for this he gets a fixed commission from the parent company,so is he liable to charge ST on the commission amount received in case of Indian customers as the parent company is going to do the weilding work in India or does it have some connection with Export of Service Rules and is Exempt from chargeability of ST...slarification is required and any reference provided to case laws or provisions or notices n circulars would be appreciated...??

Dayal

Dayal (Expert)

22 June 2012 Any servie service in relation to business or commerce, where the recipient has a place in a taxable territory ( being India) the service tax is payable by the recipient under Reverse charge as per section 68(2)of Finance Act.

Services consumed outside India, which does not have relationship with the business entity in India and the provider is equally situated outside India, then it is outside the perview of taxabaility as it is received outside taxable territory.

Gunjan Tulsyan

Gunjan Tulsyan (Querist)

22 June 2012 So here in this case the client is service provider for the parent company who is situated outside India but the customers provided by our client are located in India as well as out side India,so from u r explanation i understand that u r telling that he will have to charge ST on commission received for providing Indian Customers.