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TMI BlogIntermediary Service provided to a Foreign client for supply of goods outside the taxable terrotory of IndiaX X X X Extracts X X X X X X X X Extracts X X X X ..... Intermediary Service provided to a Foreign client for supply of goods outside the taxable terrotory of India X X X X Extracts X X X X X X X X Extracts X X X X ..... As per the amendment to Rule 2 and effectively Rule 9 (c) of PPS Rules 2012, the Income from Intermediary Service for supply of goods (Commission) is taxable w.e.f. 1st Oct. 2014. If the supply of the goods is affected by a foreign client of the intermediary located in India to a Customer outside the taxable territory of India, will the service be taxable even though the recipient of Service is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... outside the Taxable Territory of India and the Supply of Goods is done to the third party Customer outside the taxable territory of India? Can anybody give a factual explanation on the Taxability of the subject Intermediary Service? Reply By CS SANJAY MALHOTRA: The Reply: Rule 9 of Place of Provision of Service Rules defines the "Location of Service Provider" as the place for the pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pose of discharge of Service Tax Liability in specified cases mentioned therein. Further Rule 9(c) includes the "Intermediary" which has been amended vide Notification No. 14/2014-Service Tax dated 11.07.14 (applicable from 01.10.2014) (a) in rule 2 for clause (f), the following clause shall be substituted, namely:- "Intermediary""means a broker, an agent or any other pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rson, by whatever name called, who arranges or facilitates a provision of a service (hereinafter called the "main" service) or a supply of goods, between two or more persons, but does not include a person who provides the main service or supplies the goods on his account;'; Submission: With the change in the definition of Intermediary, if the commission agent or person arranging or faci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... litating service or supply of goods between two or more persons : IF SITUATED OUTSIDE INDIA and providing services therefrom is exempted from Service Tax i.e. Reverse Charge is not applicable. Prior to Change in definition Commission agents were based for e.g. in USA and goods were shipped in Europe directly from India, then Indian Company has to pay Service Tax under Reverse Charge and after am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endment from 1.10.14 exemption exists. Your issue is similar to above. Intermediary if located in India has to pay service tax irrespective of whether the supply of goods takes place from India to Overseas OR from one country outside India to another country outside India. Reply By Vinay Kunte: The Reply: Thank you for the illustrated reply. Reply By MARIAPPAN GOVINDARAJAN: The Reply: The vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ews of Sanjay Malhotra is correct. X X X X Extracts X X X X X X X X Extracts X X X X
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