Service Tax on sales commission

Dear Chandana,

The sales and maketing services provided are covered under the catgeory of Business Auxiliary Services Clasue (ii) of 65(19).

Assuming that you recive the monies in Convertible Foreign Exchange you are an exporter of services as per the Export of Service Rules 2005. You are not liable to pay any service tax. Neither is your principal to pay any ST in India. They may have to pay/ not as per their local countries laws.

You are eligible for service tax input servicescredit ( telephone, insurancne, consultacny etc) which if substantial could be refundable.

Madhukar sir

Export of  Services --------when it is render outside india and money received in Foreign Exchange

But in this case the Service render by us in India and utilized in India.

Please clarify.......

Dear Madhukar,

Thanks a lot for the clarification.

If the services are used in India the ST would have tobe paid at the applicable rates. It would not qualify as export of services.

is there any service tax on sales commission

Hi Jyoti, Services performed in India and consumed outside India is treated as export of service. For e.g. If an indian entity developes market for a foreign entity in India based on which it procures orders in India for the foreign products and the foreign entity in turn, produces the goods to be despatched to India against such orders, the services are treated as performed in India and consumed outside India, and hence eligible to be treated as export of service. In such case, there is no need to pay service tax on commission received by the Indian entity.

hI WE ARE IN EXPORT BUSINESS AND PAYING SERVICE TAX ON FREIGHT, PURCHASES FOR EXPORT, AUDIT FEES, BROKERAGES ETC. WE ARE ALSO COLLECTING SERVICE TAX ON COMMISSION RECEIVED FOR PREPARING IMPORT DOCUMENTATION. WHETHER WE ARE ELIGIBLE TO CLAIM INPUT CREDIT OF SERVICE TAX PAID ON EXPORT?

Dear geeta,

Rule 5 : where any input service is used in the manufacture of  final product which is cleared for export  or used in the intermediate product cleared for export  or used in providing output service which is exported , the Cenvat Credit in respect of  the input service so used is allowed   to be utilized. Refund is also applicable if  adjustment is not possible - according  to the rule.

Input service means any service such as : used in relation to setting up, modernisation,renovation or repair of a factory,advertisement  or sale promotions, procurment of inputs, activiites relating to business such as accounting,auditing,financing etc etc.

You  can take the credit on such input services

Thanks and Regards,

Ramesh

we are getting Ad sales income in foriegn Currency (USD) from out side of india.

in this amount we are sharing our some amount to our clients.is there any service tax applicable on this.

Please clarify.

regards

prabhakar

hyd.