Commission to foreign agents

Hi

I want to know the following. Please help

1. Is Service Tax and TDS applicable towards Commission payable to Foreign Commision Agents who are g
etting businesses in India?

2. Is there any limit towards payment of commission of foreign agents?

Thanks

Replies (1)

1.As regards Service Tax consequnces:

As pe Rule 9 of POP Rules,2012- in respect of intemediary services ( not including intermediary in respect of goods) place of provision is location of service provider....However, in case of intermediary in respect of goods place of provision is location of service receiver(As per general rule 3), .

However , vide Notification No. 14/2014(to be efffective from Oct1,2014) The place of provision in case of intermediary services (whether in respects of goods or services) POP is the location of service provider...therefore in your case service is taxable w.e.f Oct1,2014

Income Tax cosequnces:

Commision payable to Foreign Agnets is taxable only when such Agents having Permanent Establishment(any office etc.) in India.....

 

2.As per my opinion limit is only when the commision is paid in foreign currency (refer FEMA Regulations)
 

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