Will GST apply if Buyer and Sellers in Foreign Country but Commission paid in India

By | August 27, 2018
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(Last Updated On: August 27, 2018)

Buyer and Sellers in Foreign Country but Commission paid in India

we are online business website and residing in India. My website is accessed by foreign buyer and seller (not indian buyer/seller). Payment is directly made by foreign buyer to foreign seller through “paypall” who after retaining his services fees remit to seller. we are receiving commission on each transactions.

whether we come under “INTERMEDIARY” or agent and liable to GST on commission income because all transactions takes place in foreign country

Answer : If you are getting commission on such transaction then you are surely intermediary and place of supply is India even if transaction takes place out of India. It is Not Export of Services.

You are liable to pay GST.

Section 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;

Section 13 of  Integrated Goods And Services Tax Act, 2017

Place of supply of services where location of supplier or location of recipient is outside India.

….

(8)The place of supply of the following services shall be the location of the supplier of services, namely:—

(a)services supplied by a banking company, or a financial institution, or a non-banking financial company, to account holders;
(b)intermediary services;
(c)services consisting of hiring of means of transport, including yachts but excluding aircrafts and vessels, up to a period of one month.

Comment : In this case supplier of Services ( intermediary) is in India , hence Place of Supply is in India

Section 2(6) of IGST Act 2017

(6)export of services” means the supply of any service when,—
(i)the supplier of service is located in India;
(ii)the recipient of service is located outside India;
(iii)the place of supply of service is outside India;
(iv)the payment for such service has been received by the supplier of service in convertible foreign exchange; and
(v)the supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation 1 in section 8;
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