23 May 2011
Dear Sirs, We are purchasing recharge coupons from uninor & sale the same through retailers. WE got retail commission from uninor after deducting income tax TDS & we pay the net amount i.e. after deducting TDS to retailers. Whether we have to collect service tax on the whole retail commission or the net amount (difference between retail commission received from Uninor & retail commission paid to retailers). Whether we can claim retail commission paid as pure agent service
23 May 2011
Trading profit is not liable to service tax.But if uninor is paying a commission in addition to trading profit taxability of the same has to be examined in the light of factual position. Anyway in order to qualify as pure agent you have to fulfill come conditions. From the query it is understood that there is difference between commission received and commission paid that itself will disqualify you as a pure agent.
CAclubindia
