Service tax on commission on sale of branded goods

Queries 438 views 1 replies

Hello Friends,

I am selling garments under the brand name of other person and I earn commission income out of it. The VAT compliance is done by the brand owner itself i.e. the company. Billing and all the formalities are done under the name of company only. We run as a franchisee.

The taxable turnover of commission in a year is below 10,00,000. I want to know whether I fall under the SSP(Small Service Provider) for claiming no service tax on first 10,00,000 as there is an exception that the use of brand name of other person are not eligible for SSP.

Thanks

Replies (1)

Dear Ghanshyam,

No Exemption of SSP is allowed when Services are provided under brand name or trade name of others.

Since your income is in the nature of Commission and you are not selling services under any brand name of others. You are just getting commission from selling of goods on behalf of your principal company and getting Commission in consideration of services provided by you. Therefore you can claim exemption of being SSP.

 

As far the taxability of service tax is concerned following chart can help you in understanding:

Taxable Services provided    
Preceding Financial  Year Current Financial year Service Tax applicable
Less than 10 lakhs Less than 10 lakhs No Service Tax
Less than 10 lakhs More than 10 lakhs Service is taxable after 10 lakhs
More than 10 lakhs Less than 10 lakhs Service is taxable from begining (No exemption)

Regards

Shreesh Kumar


CCI Pro

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