Hi, We are India partners of a foreign company. Their product is software subscription. We are a pvt ltd company and get quarterly commission income in Foreign currency directly in our company bank account. Earlier this would just get added to our revenue and we would to pay income tax on the same. Now, is there a special treatment for our case after GST? Do we pay IGST and claim under RCM? Please note that we don't raise any invoice to receive this commission. Thanks in advance.
Hi,
Yes, you need to pay GST in reverse charge if your commission during the year exceeds INR 20 lacs.
You cannot claim any refund of that. You can adjust tax paid in RCM with another output liability, if any.
Please feel free to call/ revert in case you need more clarity
Thanks and regards
Abhishek Dugar
CA CS B.Com
Hi Abhishek Thank you for replying promptly. Assuming we don't receive 20 lacs in total from commission income during FY 17-18, we don't need to do anything right now. Is that correct? Please note that we are already registered under GST and have other income also from export of services and domestic services to other businesses also. Kindly reply and hopefully, I am sorted. Thanks again
Your welcome.
If you are already registered under GST, you can then you have to pay GST, irrespective of the turnover.
Please feel free to call/ revert in case you need more clarity
Thanks and regards
Abhishek Dugar
CA CS B.Com
Thanks Again. After GST rollout, first commission was received in August. So, if I pay GST on that now, what should be late fee charge I have to pay?
Hi
First of all, there is no reverse charge here. Since you are receiving commission, you are the service provider and the place of provision of service is India. Hence, GST is applicable on such transaction. You need to issue an invoice. Because you are registered under GST, you need to charge GST on such commission income.
For late payments, an interest at the rate of 18% per annum needs to be paid.
Hello,
If you are already registered under GST, then GST has to be charged on every receipt/ bill issued from the date GST number is issued to you.
Regards,
Keerthiga Padmanabhan
M.Com., CA, LL.B
Hello,
If you are registered under GST, then your liability to collect and pay GST arises right from the day you are registered under the GST Act.
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
