Service tax Compulsary Ded. for Foreign Agy Commission

This query is : Resolved

Feroz (Querist)
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04 April 2009 Dear to All,

Commission paying to Foreign Agent for Export Orders (Outside India) . We are paying through Bank . But they bank people ask wheather that Commission Amount service tax has deducted or not. It is neccassary to pay service Tax or not. For Foreign Agency commission payment.

It is neccassary to Pay Service Tax from India. But we are paying to outside India.

We don’t registered Service Tax .Because Company doing only exports. What to Do ?

Reply me on fkasif@gmail.com

Regards,
Feroz
.

Dayal

Dayal (Expert)
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05 April 2009 There is vide scope and dimensions of Import of Service on which recipient of services is liable to pay service tax in accordance with Section 66A of Chapter V of Finance Act, 1994, read with Rules [Taxation of Services (Taxation of Services (Provided from Outside India and received in India) Rules, 2006, (hereinafter referred as Import Rules)].

Under the said Rules your input service falls under Business Auxiliary Services and is categories under services related to business or commerce.

You are liable to pay service tax on the gross amount paid to the service provider abraod including TDS deducted if any.

The bank has not right to seek clarification as the onus is on you.

Since you are an exporter you can file a refund for the service tax paid under Notification no 41/2007 as amended from time to time.

This notification allows filing of refund of service tax paid towards exports only.

The text of the notification and relevent circulars are stated hereunder

Circular No. 106 /9 /2008-ST
F.No.137/84/2008-CX.4 dated the 11/12/08

Notification No. 41/2007-ST dtd 6/10/2007

Notification No. 32/2008-ST, dtd 18.11.2008 has also been issued to extend the period of filing of refund claim by the exporter from 60 days to 180 days from the end of the quarter to which such refund claim pertains.

You may evaluate your applicability in line with the above clarification as awarded in the statute