QUESTION

Facts of the case : One of registered person based at Gujarat has been paid to foreign commission agents towards procurement of export orders for export outside India. Since the foreign agent, who facilitates the supply of goods, is included within the definition of intermediary and as per section 13(8)(b) of IGST Act 2017 the place of supply of intermediary service would be the location of supplier of service. Hence , the location of the agent who is a supplier of service would be outside India. Therefore, I think GST would not be applicable where the place of supply is outside India. Question : Whether RCM would be payable on such transaction considering Notification No.10/2017-Integrated Tax (Rate) Dated 28-06-2017 wherein whole of the tax shall be payable by the recipient on services U/s 5(3) of IGST Act,2017 on Reverse charge basis.

ANSWER

Law Applicable:

SECTION 2 of IGST Act

(11) ''import of services' means the supply of any service, where''

(i) the supplier of service is located outside India;
(ii) the recipient of service is located in India; and
(iii) the place of supply of service is in India
 

(13) '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(8) of IGST Act

The place of supply of the following services shall be the location of the supplier of services, namely:.........

(b) intermediary services

Conclusion: Foreign commission Agent is covered under the definition of Intermediary as per Section 2(13) of IGST Act. However this transaction is not covered under Import of service as the place of supply of service as per section 13(8) of IGST Act is the location of supplier of service i.e. Outside India. Accordingly GST will not be applicable, hence question of reverse charge does not arise.