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GST on sales representation of a foreign company in India

Amit Mittal (CA) (42 Points)

13 April 2020  

I am a private limited company in New Delhi, and I represent a European company for aviation equipment as their sales agent.

The company I represent in based in France and I visit companies in India to promote their products. Once an Indian company places the order directly on the French company, the goods are delivered as per the terms agreed.

For the transaction, I receive a certain amount as a commission on the sales.

For the commission that I receive from the French company: -

  1. do I need to charge GST, since the company is based out of India and for them, it is a cost with no recovery?
  2. What happens if the sales are concluded on high seas, or foreign territory, e.g. Indian customer visits France/ any other foreign country to sign the agreement?
  3. Is there a way that the agreement between myself and the French company be optimised for GST?

 2 Replies

CA Akshay Hiregange (Partner - Audit & Assistance)   (2737 Points)
Replied 13 April 2020

Dear Mr. Amit,

These are my views:

For point 1. The transactions seems to be covered under 'intermediary' services under GST. Section 13(8) of IGST Act provides the pkace of supply to be the location of the service provider, i.e. Delhi Co. which is in India, therefore, GST would be leviable on the commission charges. (there may be alternate, risky views that it is not intermediary and therefore is an export of service, and no tax is to be paid).

For point 2. Irrelevant, as Delhi Co. is based out of India and providing intermediary services from here. 

For point 3. If services are provided on principal to principal basis, then GST could be optimized.

losslivins (it) (22 Points)
Replied 15 May 2020

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