service tax on foreign commission agent

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

23 February 2011
Assessee indian company appoint foreign commission agent outside the India for obtain business for the company outside the India. When Foreign party raised commssion bill on the assessee company on foreign currancy.
Now question is raised when assessee company make payment to the foreign party will liable to pay service tax (as import of services in India) , because ultimate benefit to the assessee company in their business

Rajesh Kumar

Rajesh Kumar (Expert)
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23 February 2011 Yes. Service Tax is payable under reverse charge method.
If it is a manufacturing company, ST paid shall be available as cenvat credit, otherwise refund can be taken (upto 1% of FOB value).

Ajay Raghatate

Ajay Raghatate (Expert)
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17 May 2011 Dear Sir,
If We have paid advance payment to foreign party twds commission, then that payment are eligible for service tax or not. We have not received final Invoice from party.
means we have to pay service tax on payment basis or accrual basis ?

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