Service Tax on commission paid in Foreign country

whether Service Tax is applicable on commission paid in Foreign country to Foreign party... revert its urgent

Replies (2)

any basic ideaabout the same, plz revert immediatly

Yes. If it is an exporter paying commission to an agent in foreign country, he has to pay first and claim refund. However, a manufacturer exporter can apply for waiver to the Central excise and a merchant exporter can apply to the service tax department. You have to furnish copy of agreement with foreigner and you have to be registered with the Export Promotion Council to obtain for waiver. Another condition for waiver is that the service tax sought to be waived should not exceed 1% of FOB value. Therefore you should not pay the foreign agent more than 9.7% of FOB as commission. If the commission is more then you have to pay the tax and apply for refund.

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