GST LIABILITY ON COMMISSION INVOICE(USD) RAISED TO A FOREIGN COMPANY

In your case you are exporting service to USA.
you can avail benefits of Zero rated supply (i.e. export)
File LUT (Letter of Undertaking) through GST Portal before raising such invoice.

No, we are not exporting service .

We are infact representing the foreign company in india and marketing on their behalf.

We are entitled for the commission margin being the difference between import Purchase order of buyer India (USD) and dealer price list )(discounted).

We shall raise invoice on supplier (foreign company) for the differential amount being our comission/service charges.

Can this be treated as export service?

As per Section 2 of IGST Act - Definition of Export of service-

If
a. Supplier is in India
b. Recipient is outside India.
c. Consideration received in foreign Currency or in INR (if permitted by RBI)
d. Supplier and Recipient are real distinct.

Export of service shall be there.

As you are providing Marketing Services to the foreign company. It shall be Export of service.
you can avail export benefits for the service you have provided.

Further if we see it through another angle of dealer discount-

As this incentive is under contract that it will be provided on the basis of Dealer price- import price, then it will be treated as Discount only for which you can raise a debit note without impact of GST.

Thank you for your prompt and informative response.

Please further clarify..

Although, we are marketing in behalf of foreign company but the end user ( the buyer of foreign company) is in India.

What shall be considered as the place of service..

End user (India buyer)

Or

Supplier (foreign company.

 

We get paid by the foreign company.

Scope of service includes..

Arrange for PO from end user to foreign company.

Consultancy to end user before sales and installation/training after sales.

Payment follow-up on behalf of foreign company.

Market update) analysis report to foreign company.

How is the situation now..

Are we still export service providers?

Sorry for being a devil's advocate :)

 

 

 

 

Dear Walia,

As per your information now picture is totally clear.

you are providing intermidiatary services to the foreign company, as an agent of the foreign company.

And As per Section 13(8) Place of supply of services shall be Location of supplier. Hence your company can not avail export benefits on the services you are supplying.
Place of Supply shall be the business place of your Pvt limited company.
Accordingly it shall not be Export of service.
You will raise invoice with Charging of CGST & SGST

Raising GST Invoice to foreign company ? I doubt .. that they will accept India GST as they can not claim the refund it in their country..

But as per Indian Law Section 13 of IGST Act applies for it.