sales commission

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

22 July 2011 Is service tax payable to a group company operating out of India on sales commission for sales of manufactured products outside India?

Dayal

Dayal (Expert)
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22 July 2011 such transactions will be considered as import of service. The tax will be payable.

This is because provision of service rules clarify that when provider of Service has his business establishment in country from where Services is provided and elsewhere, then the country having the establishment from where the provision of Service is directly concerned shall be treated as the country from Service is provided.

Moreover it falls under the 3rd category being services in relation to business or commerce, the benefit of which is accrued in India.

Querist : Anonymous

Querist : Anonymous (Querist)

22 July 2011 Thanks a lot for your reply.

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