Export of Foreign Service

Hello Sanket,

Regarding your question about GST applicability on commission received from a foreign company, here’s the clarity:

1. Is GST applicable on commission income from foreign company?

• Export of services is treated as zero-rated supply under GST (Section 16 of IGST Act).

• If your company provides services (like commission) to a foreign company outside India, and

  • The place of supply is outside India, and

  • The recipient is located outside India, and

  • The payment is received in convertible foreign exchange or in Indian rupees wherever permitted by RBI,
    then it qualifies as export of services.

2. GST Treatment:

• Export of services is zero-rated supply under Section 16 of IGST Act, 2017.

• You do not have to pay GST on the commission income from foreign company.

• You can claim refund of input tax credit on inputs/services used to provide that service.

3. Relevant Sections & Provisions:

• Section 2(6) of IGST Act: Defines export of services.

• Section 16 of IGST Act: Zero-rated supply.

• Section 54 of CGST Act: Refund of input tax credit on zero-rated supplies.

• Place of supply rules under Section 13(2) of IGST Act must confirm that supply location is outside India.

4. Conditions for Export of Services:

5. Summary: