Is GST applicable / payable in India on the commission earned in foreign currency from foreign suppliers

Is GST applicable / payable in India on the commission earned in foreign currency from foreign suppliers

Sir, we are an Indenting company who are working in India as a commission agent dealing in Metals. We are an agent and are selling the metals of our overseas suppliers to different clients in India and earning commission in foreign currencies from suppliers. We are just an intermediator between buyer and seller.
My question is that do we need to pay GST on the commission earned for the services provided to the overseas supplier ? If NOT, then under which section of GST do we get the relief ?
Thanking you in advance.

Best regards,
Soumya Chowdhury
Director
Trebeck Metal Trading LLP
Kolkata

Asked 1 day ago in GST

Yes, GST is applicable in India on the commission earned in foreign currency from foreign suppliers.

Why?

You are acting as an intermediary (agent) under Section 2(13) of the IGST Act.

As per Section 13(8)(b) of the IGST Act, the place of supply for intermediary services is the location of the supplier (i.e., India).

Hence, it does not qualify as export of service, even if payment is in foreign currency.

GST must be paid on the commission.

No relief available under export provisions due to place of supply being India.

Let me know if you need a format for invoicing or compliance help.

Shubham Goyal

CA, Delhi

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Thanks Mr Goyal for your prompt answer. Much appreciated.

Btw, what do you mean by " export of service " ?
What i understood is that suppose, if we make a deal with a third country i.e for example, if i sell the product of my supplier based in Europe to my buyer based in Singapore and earn commission in foreign currency for that deal in India, will i get the relief from GST ? If so, under which section ?

Also, Can we claim the GST amount which we have paid during the FY for the commission earned in India for the products sold by us in India as an agent, at the time of Income Tax return ? If so, under which section ?

Best regards,
Soumya Chowdhury

Asked 1 day ago

Is GST payable on foreign commission earned as an agent in India?

Yes, GST is applicable if you’re acting as an intermediary (agent) for a foreign supplier and selling to Indian clients.
👉 As per Section 13(8)(b) of the IGST Act, place of supply is India, so no export benefit applies, even if you're paid in foreign currency.

What if you arrange a deal between two foreign parties (e.g., Europe → Singapore)?

In that case, your service may qualify as export of service under Section 2(6) of IGST Act.
👉 No GST is payable if:

Both buyer & seller are outside India

You receive commission in foreign currency

You file a Letter of Undertaking (LUT)

You can claim Input Tax Credit (ITC) in your GST return if eligible.

For Income Tax, pay tax on your commission income excluding GST.

Let me know if you need invoice templates or LUT help!

Shubham Goyal

CA, Delhi

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- If you are facilitating or arranging a main supply of goods between the two persons then the services provided by you are classified as intermediary services. In such a scenario place of supply is location of supplier of the service provider

- In case of supply of goods on own account on principal to principal basis then such supply is not classified as supply provided by an intermediary

However if you have the following documents then the services provided by you are not taxable under the GST

1. Copy of Bill of lading

2. Copy of executed contract between seller and buyer of goods

3. Copy of commission debit note raised by you to service recipient located in foreign country

4. Copy of certificate of origin issued by service recipient located in foreign country

5. Declaration letter from intermediary

Maintain the above documents atleast for a duration of 5 years

For detailed discussion you may opt for phone consultation

Vivek Kumar Arora

CA, Delhi

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