commission for reference

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i receive commission for referring customers in India to a foreign supplier, the foreign supplier gives me commission in foreign currency, am I liable to register and pay GST

Answered question

Export of services under the GST regime

“Export of services” means the supply of any service when –

i) supplier of service is located in India;
ii) recipient of service is located outside India;
iii) place of supply of service is outside India;
iv) payment for such service is received by supplier of service in
convertible foreign exchange;
v) supplier of service & recipient of service are not merely establishments
of a distinct person
All these conditions should be fulfilled for a service to qualify as ‘export’.

In case a transaction does not satisfy any one of the conditions for export, the same should be liable to GST. The supply will be treated as inter-state supply and will be subject to IGST.

Further Explained:

You are facilitating Sales for overseas suppliers for commission .it means you are acting as an intermediary . As per sec 2(13) of IGST ACT 2017 “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;

Now as per sec 13 (8) of the IGST Act 2017, Place of supply for the intermediary services shall be the location of the supplier i.e in your case in India.

Location of supplier of service : India

Place of supply of service : India

So even if the recepient of the services are outside India still it will not be treated as export of services as all the conditions for export of services are not fulfilled ( Place of supply – India; Refer Sec 2(6) clause iii of IGST Act 2017 )  and hence taxed in india .

If you are under threshold exempted limit, you are not coming under the preview of GST

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