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commission agent

amar preet singh (professional) (229 Points)

19 October 2009

sir, we are the marketer of barnded product, we sell branded product through c & F agent. i just wanted to know that is there any threshold limit of service tax on service would be applicable on c & f agent, our agent sells product on commission basis. in my point of view if any company sell branded product then there will not be any threshold limit. you are requested to kindly give the answer in detail if neceessary give any circular or notification in this regard

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8 Replies

Rajesh Kumar (Advocate- Tax) (7806 Points)
Replied 20 October 2009

Even when the commission agent is selling branded products, SSI exemption on service tax of output service (commission agnecy) is available. What is to be understood that as the output service is not branded, SSI exemption is available.

Sunil (Trader) (2611 Points)
Replied 20 October 2009

Rendering services as comission agent is too generic to be branded. An example of branding is say Trump or Dolphin mobile service of MTNL or Cellone of BSNL. In your own service if you use a brand name of someone elses whether registered or not, you are not elegible for the small providers exemption. Therefore if you render any service under your own brandname, have it registered.

As an example, if a hair dresser is providing hair coloring service and he bills as service for coloring the hair he is exempted upto 10 lakhs. However if he bills it as 'Color Soft' hair coloring services, he gets no exemption as Color Soft may be brand name of Godrej or L'Oreal.

However, you better seek help of professional. I am a businessman and cannot guide you on specifics in branding services.

Rajesh Kumar (Advocate- Tax) (7806 Points)
Replied 20 October 2009

Whether a service provider is using brand name of others or not, it is seen with respect to the brand of output service. In case of commission agent, there are branded commission agency- like TTK or Godrej distributors.

Manoj Pandey (associate) (23 Points)
Replied 20 October 2009

Hi Sir,

We are a financial proffesional, and deals in LOAN AGAINST PROPERTY, HOME LOAN, PROJECT LOAN. We have DSA of all those Banks who provides this types of Loan and we have private financer also. I need just reference from you and u earn in lakhs per month.

pls contact mr Manoj -9953324070, or mail at - financecare @ in.com.

for more details find attach.

Attached File : 26 for ca.doc downloaded: 227 times

Rajesh Kumar (Advocate- Tax) (7806 Points)
Replied 20 October 2009

Thanks for the offer!

Hope you are paying service tax, otherwise you will need professionals in any way.

Sunil (Trader) (2611 Points)
Replied 20 October 2009

By Godrej Distributor do you mean their 'SAMPARK' Management system of Godrej as Brand or is the name of the company itself considered as a brand? If they consider company name as brand name, then even a CA would be denied the exemption as he organises himself in proprietorship capacity as XYZ & Co, CAs. Amar Preet had confused between branded product and branded service. I would assume that to deny exemption, the department is looking at branding of service and not of selling branded goods. For goods the exemption is not available on excise for branded goods. Logically the same case here. Only I had wrongly assumed that exemption is denied if you use brand name of others. Then it must be denied if using own or even another persons brand name for service.

Madhukar N Hiregange (Chartered Accountant) (39039 Points)
Replied 21 October 2009

The brand name restriction is applicable when the user is using the brand name of a SERVICE PROVIDER i.e. like Blue dart to indicate the connection of his service with a service provider . In such cases the coueir agency say - X couriers which uses the name/ logo of Blue Dart who is also a service provider would not be eligible for the exemption of Rs.10 L under not. 6/05.

Maruti Authoirsed Service Station - If Maruti is not in servicing but only in manufacture and sale of cars + parts. Then all the authroised Service Stations would be eligible for the Rs.10 l exemption

Sunil (Trader) (2611 Points)
Replied 21 October 2009

A hairdresser known to me had problem for rate list displayed in his shop. For hair dying service he literally categorised the prices for hair coloring with Godrej Color Soft, Revlon Color Silk and L'Oreal, Wella etc all at different rates. The problem basically was he could not separate the bill for color and service as he was using colors in Bulk. What he actually ought to have done was classified his service as ordinary, grade A, premium etc. He was only aware that he had exemption of 10 L but was not knowing that he should not use brand name.