Commission for providing services of selling products of foreign company is taxable at 18% under GST

  • GST
  • Caselaw
  • financeseva

Fact of the Case 

  • The applicant entered into an agreement with a foreign company to sell its machinery. It received commission income from the company in foreign currency.  
  • It files an application for advance ruling to determine whether services provided by it were in the nature of the services of commission agents or not. 

Judgement 

  • The Authority for Advance Ruling observed that services provided by the applicant were services of commission agents or commodity brokers who negotiate between buyers and sellers as a facilitator for the supply of goods for which they are paid a fee or commission. Such service may also be called "intermediate services".  
  • Furthermore, since the recipient of service in the immediate case was located outside India, place of delivery of services shall be the location of the provider of services. Therefore, supply of services would be considered as intra-state supply of services and would be liable to CGST and SGST at rate of 9% each.