Commission on export

Dear Sir,

 We are a company in the export of leather and leather goods.We are exporting the goods to Japan and a japanese person is arranging orders for us.We are paying a handsome amount of commission to him.We are having the following queries

 i.Is service tax applicable in case we are remitting commission to japanese national?First we will receive the payment for the export and from that amount we will remit the commission.

 ii.Do we need to deduct the witholding tax or tds ?If yes what will be the rate of tax to be deducted ?

 iii.Is there any maximum limit of the commission to be paid abroad by RBI/FEMA or any other relevant act ?

 iv.What is DTAA between India and Japane on this point ?

 Please reply referring the exact provisions of the Act.

Thanks/With Regards

 

Replies (1)

1. Service Tax applicable and company is liable to pay service tax (reverse Charge

2. Withholding Tax @ 10% required to deduct

3. For DTAA Visit https://law.incometaxindia.gov.in/DIT/File_opener.aspx?fn=https://law.incometaxindia.gov.in/Directtaxlaws/cbdt/dta/A1_Japan.htm

 

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