Question11:

My Indian based client had referred one India based customer to a Foreign Company and such customer had bought some goods from the foreign company. Now Foreign Company want to give some commission on such referral business in dollars to my India based client. Kindly let us know GST applicability. Whether it would be Inter State Service that is Export of Service Or it would be Intra Sales Service; Would it be a Commission or more appropriately Intermediary Service as covered by Sec 13 (8) (b) of the IGST Act, 2017?

Answer:

Section 13(8)(b) of IGST is very rightly quoted by you. It is not export of service merely payment in dollar by a foreign company will not make the transaction export Section 2 of IGST Act defines export as follow
(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; (Reply dt. 27/11/2017)