Affiliate marketing income from abroad

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%.

- 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 compliances.

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

You have to file monthly and quarterly GST returns and retain all invoices as the invoice details are mentioned in GST returns. I am Chartered Accountant practicing in Gurgaon. You may reach out to me for GST return filings.

I think if you consider it as commission then in that case you wont be able to get benefit of export of service as in case of commission place of supply would be in India and hence such service would be liable to GST.

If you need further discussion you can book a phone consultation.

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.

- Filing of GST returns will be on monthly and quarterly basis. Proper presentation of the income and ITC is critical otherwise you may land into problem. Also check income tax provisions.

Hi,

Service like affiliate commission often falls under the trap of intermediary and thereby looses export benefit. However, its a detailed fact specific excercise to see whether your services falls under intermediary or not.

its advisable to discuss in detail over call or in person.

If its qualify as intermediary, then you will have to pay gst@18% on commission income.