Commision / export of services

Hi,

Yes, considering your commission revenue exceeds INR 20 lacs, you are required to get registered under GST and charge GST on the commission amount.

Your services will not be considered as export of services as one of the key conditions for export is that the place of supply of services should be outside India. however in case of commission agent services, the place of supply of services is considered at a place where service provider is situated. This, place of supply in this case is in India and its not export.

Yes this would be covered under GST as in case of commission agent place of supply would be the place of agent and hence liable for GST.

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Thank you.

Dear Sir,

Hope you are doing well !!

Your services are classified under intermediary services. 

The place of supply of intermediary service is usually the location of the supplier. This situation includes the export of intermediary services as well. However, as per the general rule, the place of supply of export is outside India and therefore exports are zero-rated. Since there is a specific rule, it will prevail over the general rule, and accordingly, in case of export of intermediary services, the place of supply will be within India.

Now, when we apply the above provision to intermediary service where both the seller of goods and buyer is outside India, the location of the supplier, i.e. the location of the intermediary becomes the place of supply. This transaction gets covered under GST, despite the fact that the origin and the consumption of goods are occurring outside India.

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.

The rate is 18% on commission income.

It is neither export nor import if you act as trader and hence no GST on same.

- If the invoice is not issued in your name by china vendor, then you will not be treated as an agent of Africa customer and commission will be chargeable to GST when it will cross the threshold limit of Rs.20 lacs.

- As a trader, it is an act of drop shipping business and it will be treated as exempt supply of goods. I am not aware of SCOMET but it is not export from India. If you obtain GST registration due to trade requirements then you need to file GST returns on regular basis showing turnover under the exempt category.

Hello,

Yes, there would be GST liability, since your services wouldn't qualify as exports because the place of supply would be in India. On crossing the threshold for registration of Rs. 20 Lakhs, you would be required to register and make compliances under GST.

I hope this answer satisfies your requirements.

Regards,

CA Hunny Badlani

Acting as a trader for goods bought and sold outside India wouldn't be liable to GST.

If you act as trader there would be no GST liability.

Please let us know how invoicing will be done in this case. Taxation under GST shall depend on the same.

We may discuss the issues further.