Commission in foreign currency

Commission in foreign currency

Thanks for giving reply.

1. when raising inbvoice for commission to be rceived from foreign principals,
it shows gst tax analysis. which can be different  anad can vary depending on
when foreign remittance rcvd and exchange rate executed..
inf poss action to record entry
a) without tax analysis.
b) after rceipt of remittance and bank's final amount, how to record entry
showing taxable value (gst = 100/118*18).
c) is this entry to be as  rcm?
d) under which gstr1 return and column - value of commission to be shown i.e. under b2b ? or 
 nil rated invoice 8a..
 or under  rcm or under.
or under 
gstr 2 - (pls inf in detail)

Asked 7 years ago in GST

The question is not much clear. What I understood is, you are receiving commission from a foreign principal in a foreign currency. So, this is an export of service. Subject to other conditions, it is a zero rated supply.

Hence, you have 2 options:

1. Export while paying IGST and claim back the refund.

2. Export under bond/LuT without payment of GST.

Going with Option 1,

# You have to pay IGST @ 18%.

# This is under normal charge.

# In GSTR 1, enter this detail under Export.

# Claim refund of such IGST paid in Form GST RFD 01.

# FIRC copies are mandatory for each such foreign remittance.

Lakshita Bhandari

CA, Mumbai

5687 Answers

942 Consultations

Talk to Lakshita Bhandari

commission received from foreign is export of services thus you have to enter in export table, for gst purpose rate applicable is custom rates and for accounting you have to apply tt buy rate and tt sales rate as per sbi on that date.

Lalit Bansal

CA, Delhi

776 Answers

61 Consultations

Talk to Lalit Bansal

Hello,

As per the details provided by you it appears that you fall under Export of Services and in such a scenario you have to make an application for a BOND/LUT to make without gst exports.

In case you have not applied for one then you will have to pay GST on the same and then claim a refund.

Trust this clarifies your query.

Feel free to call / get back in case of further clarifications.

Thanking You.

Regards,

Rohit R Sharma

BCOM, FCA, LLB, CERT. FAFP

Rohit R Sharma

CA, Mumbai

2104 Answers

95 Consultations

Talk to Rohit R Sharma

Hello,

The export of services has to be entered under the tab of export. You have an option to select an option of with pay/ without pay. If you already have a Bond/ LUT then you shall file it without pay or else you will have to pay taxes for now and then claim a refund.

Regards,

Keerthiga Padmanabhan

M.Com., CA, LL.B