Dear All,
I am a Finance Manager in an SME. We have a third party agent in US who helps us getting orders from proposed customers. Recently as per a service agreement, they have asked us to pay them 5% commission on the quarterly sales figure to them. Say for July to Sep 14, Sales, we are to pay them 5% on 5th day of Oct 14. We will share the data with them and based on that they will share a bill every quarter without charging any service tax.
In this regards, I have the below qs:
Will the above give rise to any Service tax Liability?
If yes then in whose hand?
What service category will it be treated as - Commission on Sales/ Business Auxiliary service?
If say, service tax Liability incurs in the hand of service recipient, since this might be a case of Import of Service, then can the recipeint that is my company, claim cenvat credit on the amount of Service tax that we pay?
How will TDS be calculated and at what rate?
Thanks in advance for all of your kind response.
Rgds,
Deblina
CAclubindia
