Commission on sale is being paid in foreign currency to a foreign citizen by an Indian company. The company has been paying the commission since FY2007-08.
The company has recevied a letter from service tax department. The letter says that through the company's bank the department has come to know that the company has paid remittances in foreign company during FY2007-08 to 2011-12 to the persons who have provided taxable service from the country other than India. The letter further says that the company may be liable to pay service tax and hence has asked for some documents (like tax audit report, bills raised for such services etc.) from the company.
My question is - Is the commission on sale paid to a foreign citizen liable to service tax for FY2007-8 to FY2011-12? If yes, who is laible to pay the service tax?
Further after the changes in service tax from july 2012, in the above mentioned transaction is service tax applicable after july 2012? And who is liable to pay the same?
CAclubindia
