Here is a query !!!

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udhayakumar

21 Points Posted on 03 December 2007

Well, Here is a case of new entrepreneur who has visited me today ....

Mr.X (Indian Resident) is a sourcing agent for garments to Mr.Z who is a UK Resident. Mr.Z doesn't have any place of business office in India. Mr.X enters into an agreement with Mr.Z for making sure that Mr.X will be responsible for good quality of goods to be exported to Mr.Z business centre in UK. Mr.X will be receiving (in foreign currency) Commission on the basis of FOB Value on goods exported to UK.

Is Mr.X liable to Service Tax?

If Yes on what basis?

Will it not be considered as Export of Services outside India?

Please answer....

thanks and regards

udhay

what about the following questions...
1. the services are delivered outside india to a Non
Resident.
2. The service charges are recd in convertible forex
3. the benefits of the services are not derived with in India
4. There is no place of business for the service receipent...

can u explain for the above doubts??

Replies (3)

Dayal

Gen. Manager - Indirect Taxation

3190 Points Posted on 04 December 2007

Yes service is provided in India and consumed in India.

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Adv. S Sharma

Lawyer

339 Points Posted on 04 December 2007

hi yes he is liable for serice tax. dear when service receives in india then lability for service tax arise here

chandrashekara.R

CA Final

43 Points Posted on 05 December 2007

hi,udaya he falls under Bussiness auxiliary service as commission agent clause (zzb), and he is liable to service tax. service provided by him wil not be treated as export of services since BAS is not included in Export of service rules. commission agent means any person who acts on behalf of other person and causes sale or purchse of goods or provision of services, and it includes, 1) undertaking any activity inrelation to sale or purchase of such goods or services 2)deals with goods or services or documents of title to such goods or services, 3)collects payment of such sale price of goods or services, 4)guarantee for collection or payment for such goods or services if he provides service also in relation to clearing and forwarding of such goods in any manner, he will be categorised as consignment agent under clearing and forwarding agent. he will be exempted from service tax, as export of service