Service tax applicability

Service tax applicability

Hi Lakshita,

''Greetings''

Hope you are doing well. 

I work as a sales and marketing consultant for UK firm in India and Sri Lanka. I promote their products in India and Sri Lanka by meeting with key decision makers and influencers. As a result of my activity, company distributors in India import goods directly from UK (invoice raised from UK and payment made to UK) and stock and sell in India and SL. My fee is paid every month in GBP (Pound Sterling) currency into my Indian bank account deposited from UK directly. Although I do send quotes to local dealers in GBP, I do not raise any invoice myself locally in INR or GBP. My agreement with the company is not renewed annually but offers exit option for both parties with three month notice. My question is as follows:

1. My income is over 20 lakhs from this consultancy do I need to pay service tax? Or I my work will be considered a deemed export of services?
2. Apart from the fee I receive impress amount every month together with the fee to cover my travel expenses in the country and in SL. For these I raise expense statement in GBP and send originals to UK. If I am liable to pay ST in India will that be applicable on this amount also or only on my fee.

Looking forward to hearing from you.

Warm regards

Santosh

Asked 7 years ago in Service Tax

Hi Santosh,

Although the question is specifically ask to Ms. Lakshita, I am also answering the question.

1. If I understood it correctly, you are only a commission agent for UK company and you receive your commission based on sales. In this case, you need to pay IGST. You need to raise invoice on UK company with GST.

2. There is a slight confusion here. However, in my view GST will be applicable on the expenses also.

Please feel free to call/ revert in case you need more clarity.

Thanks and regards

Abhishek Dugar

CA CS B.Com

Abhishek Dugar

CA, Mumbai

3576 Answers

183 Consultations

Talk to Abhishek Dugar

1. The services offered by you are intermediary services. In case of intermediary services, the place of provision of services is location of the service provider i.e. you. So, GST will be applicable @18% on the services provided. It cannot be treated as export of services.

2. Such reimbursement of expenses shall be included in the value of taxable supplies and GST will have to be paid.

# I assume that your questions are regarding GST, and not service tax relating to past periods.

Lakshita Bhandari

CA, Mumbai

5687 Answers

942 Consultations

Talk to Lakshita Bhandari

Hello Santosh,

To start with there is no Service tax as of now as GST has kicked in and replaced service tax.

In your case, GST is applicable but since it is export of services you can apply to your jurisdictional officer to grant you permission to export services without payment of duty against a LUT/ Bond.

If they grant you the certificate then no tax will be paid by you against your services rendered to the UK firm but you will have to mandatorily file your GST returns.

Trust this clarifies your query.

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

Thanking You.

Regards,

Rohit R Sharma

BCOM, ACA, LLB-GEN, CERT. FAFP

Rohit R Sharma

CA, Mumbai

2104 Answers

95 Consultations

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