Service tax for services rendered abroad

If I receive commission from a company in the USA, which is on account of a sale that they concluded in Europe through my lead, am I required to pay service tax on such income? The service was rendered and availed outside of India. The amount of commission on multiple sales will easily cross Rs.10Lacs in a financial year.
Replies (8)
Commission received out of India, not liable for service tax
Since service provided by you is in relation to Goods Rule 4 of PoPS Rules will apply and service will be deemed to be provided at the location of Goods I.e. UK, hence no Service Tax

Thank you Ajay and Dig Vijay.

If I am asked to produce proof to show that this is indeed service rendered abroad, then what documentation may I be asked for?

New rule introduced from Oct 14 includes commission agent  of goods as intermediary and hence any commission received by commission agent for sale of goods from overseas would be taxable because taxable territory in case of Rule 9 of Place of Provision will be that of service provider i.e. India. 

This is my opinion. Kindly check the new Rule.

 

rengaraj r.k

 

Can I legally call it something else, other than commission, like say fees, to avoid incidence of service tax?  The US company will of course not pay the service tax over and above the commission %. So instead of 5%, i will get only 4.2% in hand.

 

the 5% was fixed after taking into account my time and the cost of calls etc. that I make, thus it pinches the most,

I agree with Mr. Rengaraj..the Rule 9 of PLACE OF PROVISION OF SERVICE,2012 GOT AMENDED AND ACCORDINGLY LOCATION OF SERVICE PROVIDER i.e. "YOU" shall be the location of service and hence it is in the TAXABLE TERRITORY, LIABLE FOR SERVICE TAX. 

HOWEVER IF YOUR TOTAL TURNOVER DOES NOT EXCEED 10 LACS IN PREVIOUS YEAR THAN YOU CAN CLAIM SMALL SERVICE PROVIDER EXEMPTION OF Rs. 10LACS  UNDER NOTIFICATION NO.33/2012 

E.G IF YUR INCOME IS 15 LACS THAN PAY SERVICE TAX ON 5 LACS @ 12.36% (15 LACS-10LACS under N.N.33/2012)

Thanks all, for your inputs and clarifications.

 

I do find this totally unfair, since the US people will not care to pay me any service tax. I will thus end up paying nearly 50% tax on such income.

 

It makes sense to open a virtual office abroad, say in a free zone in Dubai, if the 14% amounts to more than the cost of running the office.

Gents, here's an after-thought, will the income that is earned from abroad, and in US$ or Euro, for consulting provided, not termed as Income from Export of Services, and thus exempt from payment of Service Tax?

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