Export of service under lut

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Hi

An Indian company is agent of a foreign based company and selling their textile machines in India.The machines are invoiced directly by foreign company to customers in USD and customers import the machines after paying custom duty(IGST) and Indian company got commission from that foreign based company in US Dollars.

"For getting commission, Indian company raise a commission invoice to foreign based company but that being a Indian company can not charge any GST from foreign company in that invoice. Foreign company is not subject to Indian taxation laws".

In this case, Indian company provide agency service to that foreign Company. i.e. Export of service. So, Indian Company raise invoice using LUT and without charging IGST.

Please let me confirm Indian company need to pay IGST?

Replies (2)
The commission service falls under Intermediary Services for which place of supply is place of service provider i.e., Place of Indian Company i.e., India and hence place of supply is India. One of the condition for export of service is place of supply should be India and hence the above wouldnt fall under export of service and hence GST is applicable.

Thank you Sir

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