Good day to you all. My wife and I have started to work ( since Apr2019) from home in India as agent/s of Taiwan / South Korea based company ( seller) and promote their products to buyers in Europe / Africa etc. ( no buyer from India is being approached ) In case a deal / sale materializes we would receive commission ( if any ) from seller in USDollar as Overseas Inward Remittance directly to (an individual's) SB Account in India. I request clarification on following points ; 1. Is the commission so received taxable in India ? 2. would it be taxed as Individual Income (per tax slabs ) 3. Is GST also applicable ? ( neither the seller nor buyer are based in India.) 4. do I need to get income ( received as remittances) audited by CA and then file / submit ITR as individual category 5. Any other tax liablity on the above commission. Please clarify Regards
1. Yes its taxable.
2 Yes it would be.
3. Yes if the income is above 20 lakh during the year but you dont have to pay any GST since it will be export of service but you need to register
4. No there is no need for audit but i would recommend to get assistance of CA while filing your ITR.
5. No.
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Hi
1. Yes
2. Yes
3. Yes. You need to register under GST mandatorily irrespective of the turnover. GST rate is 18%.
4. That would depend on your turnover. How much are your annual gross receipts?
5. It is GST @18% plus income tax according to slabs as added by cess and surcharge, if applicable.
Thanks for good support and guidance. Further to question and clarification received, I request if another kind CA can please confirm the points advised by respected Mr Naman Maloo. ( just as second opinion ) in addition ; A) May I know what is documentation requirement to be submitted to concerned authorities in India ; i) -- say at the bank where I have SB A/c and would receive remittance of commission ii) -- tax deptt ( prior to ITR filing time ie in July 2020 ) iii) -- any other concern deptt. B) hoping optimistically in case income is above 20lac / yr., and I am required to get GST registration can I proceed as an individual / jointly as with my wife ? OR I need to first register a company / sole propiertor ship etc. ( I have no other biz acitivy except agent work as informed in earlier question ) --- This is in light of the fact that " No GST is payable" as it is considered as export of service. Regards
Please note that there is no turnover limit of 20 lacs applicable in your case. It is not at all export of service.
It is an intermediary service for which place of supply becomes India. The, it cannot be classified as export of services. Also, it is covered under compulsory registration under GST.
Currently you are not required to submit any documents but if someone ask you need to submit your bank statement and bills issued by you as a proof.
Sorry I would like to correct myself you are a commission agent so the place of supply would be place of supplier and therefore you need to pay GST and register for it only if turnover exceeds 20 lakh and once it exceeds you also need to pay GST.
If you are doing it with your wife but the business is being done on your name then you need to register as an individual in GST and no separate registration is required for sole proprietor.
Hi,
- As you both are providing services in the individual capacity therefore only two laws are applicable on you in India i.e. Income tax and GST.
- Under Income tax, Audit is applicable if the gross receipts will exceed Rs.1cr otherwise you need to prepare balance sheet and profit & loss account and pay taxes on profit.
- Under GST, you are required to obtain registration compulsory and pay GST @18%.
Thanks
Dear Sir,
Hope you are doing well !!
1. Yes,It is taxable in India.
2.Yes
3.It will be treated as income from commission. GST@18% is applicable on it.
GST registration is mandatory.
4. It depends on your turnover/receipts.
5.Apart from income tax, GST@18% plus applicable surcharge & cess on your commission income.
No, it will not be treated as export of services.
GST registration is mandatory without any turnover limit.
Hello,
1. Yes.
2. Yes.
3. Yes, it will be considered intermediary services.
4. If you will be covered under Sec. 44AB, it depends upon your turnover and net income from it.
5. No.
I hope this answer satisfies your requirement.
Regards,
CA Hunny Badlani
You need to file returns and make compliances as per both the tax laws. No other documents required to be submitted before the filing of return. Balance sheet and profit & loss account might be required to file with the income tax return.
Since you both are doing this work, it would be more beneficial if you make two sole proprietorships (Individual) one in your name and the other in your wife's as compared to forming a company for it.
Hello Sir,
1. Yes.
2.Yes.
3.Yes, it will be treated as intermediary services.
Intermediary generally charge commission against the services provided by them. The commission income so earned is subjected to GST and all the provisions of GST law is applicable accordingly.
4.It depends on your turnover. It is mandatory only if the total sales/ turnover exceeds Rs. 1 crore during the previous year relevant to assessment year.
5.Income tax as per slab rate & GST@18% on intermediary services.
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