Is GST applicable for international trade commission

Hello,

1. Yes, GST would be applicable to this intermediary service. The place of supply of such intermediary service is the location of the supplier.

2. Depending upon the volume and value of the transactions, it would be advisable to open a current account for your business. 

3. Income Tax is applicable to the net income from business after deduction of eligible business expenditures. Income Tax is charged as per slab rates. 

I hope this answer satisfies your requirements. For a detailed resolution of your query, you can contact us directly or take a phone consultation.

Regards,

CA Hunny Badlani

Dear Sir,

Hope you are doing well !!

As per my understanding, your services fall under the category of intermediary services, place of provision of services will be place of service provider (I.e. India)

Definition of intermediary is contained under section 2 (13) of Integrated Goods and Service Tax Act, 2017 and the same is reproduced here under for ready reference ;

“intermediary means a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both, or securities, between two or more persons, but does not include a person who supplies such goods or services or both or securities on his own account”

As per Section 13 (8) (b) of the same Act, the place of supply of “intermediary services” shall be the location of the supplier of services. Therefore, the supply of the intermediary service is in the taxable territory and so the service is taxable and as a service provider, you have to discharge the tax liability.

-GST registration is mandatory for intermediary services without any threshold limit.

-Intermediary generally charge commission against the services provided by them.

-The commission income so earned is subjected to GST@18% and all the provisions of GST law is applicable accordingly.

- You need to issue an invoice to the company. If they are paying you a fixed amount and not paying GST in addition, you simply need to do reverse calculation of GST according to the amount so received.

-If you are working as sole proprietor (which is better then company) then income tax would be calculated on slab basis and not on flat rate i.e. 30%.

-You need to open current account for the same.

- Basically GST is a collection from customer and not from own pocket.It is upto you how to collect it from customer either by increasing the commission amount or charging GST separately on the current commission.

-In case there is no commission for a particular period, you will have to file NIL returns. GST shall have to be paid for the month in which invoice is made OR payment is received- whichever is earlier.

We may assist you in entire procedure & GST/tax compliances.

It is advisable to take a phone consultation for detailed discussion.

1. No, it won't be considered as export of services.

2. Yes, you can register for GST under your individual name.

3.Yes, you can open current account in your individual name.

It is advisable to take a phone consultation for detailed discussion.

No, it does not qualify the conditions for the export of services.

Yes, you can register under GST and open a current account in your individual name.

Hi

Kindly refer to Notification No. 20 /2019- Integrated Tax (Rate). If all the documents so mentioned therein are available with you, such commission will be exempt from GST.

If such documents are not available, the commission income shall be chargeable to GST @18%. This wont be classified under export of services.

If this is a one time transaction, you may receive it in savings bank account and income tax could be paid considering it as income under the head other sources. The tax rate will be according to the slab rates.

In case of chargeability of GST, you may register under GST through your PAN; need not constitute a firm/llp/company.

No not applicable. You can read this for more information: https://www.taxontips.com/services-provided-by-an-intermediary-agent-to-service-recipient-located-outside-india-wont-be-liable-to-gst/

Tax on commission would depend on various factors.

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement. You can even book phone consultation for further personal assistance.

Thank you.

- If you can fulfill the conditions specified in the notification no.20/2019 (IGST rate) then you are not required to obtain GST registration otherwise you would be liable for GST registration and rate is 18%.

- It is advisable to open a current account but the challenge would be bank will ask for GST registration certificate for opening of current account in case of sole proprietorship.

- As you have just started the business, it is advisable to go with sole proprietor. Later on with the increase in the turnover you can convert it into company or LLP. 

Hi

1. The CBIC vide Notification No. 20/2019- (IT Rate) dated September 30, 2019 amended Notification No. 09/2017- (IT Rate) dated June 28, 2017 so as to exempt “Services provided by an intermediary when location of both supplier and recipient of goods is outside the taxable territory

2. Current account is not mandatory but recommend to open .

3. For calculation of income tax we may assist you please have a phone consultation.