Question

My question is below are thing we need to clear from GST Point of view on Commission receivable amount
We get commission from FELDER KG, Austria in way of credit note for Direct exporting machines to client from them
Most of the clients are of Maldives, Bhutan , Sri lanka and some are from India also
For this Direct export deals with customers , communication happens from India and we communicate with FELDER KG Austria & Customer both also after installation of machines we provide service to client from India regarding maintenance of machines
Credit notes we received in name of Felder Wood working machine, Gujarat
For this year we will receive the Credit notes in month of December So please advise us whether we have to pay GST on this? and if yes then can we adjust the same against LUT bond or we have to pay the IGST separately per month and take set off in next month
Please advise Also check and let us know about new format of LUT bond at earliest
 

Answer

In the given case you are providing service as intermediary, so the place the supply is determined as per section 13(8) of IGST Act as reproduced below:

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;
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As the Place of supply is in India (location of supplier of service), so it is not considered as export and therefore export benefits will not be available and GST is applicable on commission income.

So far as service of repair is concerned which is provided from India, the Place of supply is determined on the basis of location where the service is actually performed on goods as per section 13(3) of IGST Act i.e. If goods are brought to India for repair then POS shall be India and normal provisions of GST will be applicable. However this provision will not apply in case the goods are temporarily imported into India for repairs and are exported after repairs without being put to any other use in India, than that which is required for such repairs as per Notification no. 158/95-Cus dated 14-11-95 subject to conditions specified in the notification enclosed herewith.

But if repairs on goods is performed outside India then POS shall be the location where services are actually performed i.e. Outside India then it is considered as export of service if all the conditions given in section 2(6) of IGST Act are fulfilled that are mentioned below:
'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.13/10/2018)