Service tax for commission agents

Hi Harshikesh,

The service you are referring to squarely comes under the ambit of service tax, under Businees Auxiliary service The Act defines  Businees Auxiliary service as:-

 any service in relation to, —

(i)            promotion or marketing or sale of goods produced or provided by or belonging to the client; .

Hence, this service will be charged under the service tax act.

Further, tax will be charged on the gross amount of consideration, which includes variable as well as fixed component.

Regards.

Fyi:

1) ”Commission Agent” means any  person who acts on behalf of another person and causes sale or purchase of goods, or provision or receipt of services, for a consideration, and includes any person who, while acting on behalf of another person —

(i) deals with goods or services or documents of title to such goods or services; or

(ii) collects payment of sale price of such goods or services; or

(iii) guarantees for collection or payment for such goods or services; or

(iv) undertakes any activities relating to such sale or purchase of such goods or services;\

2) For more details refer Section 65 (105) (zzb) of the Finance Act, 1994