QUESTION

We are registered person in India, arranging sale of goods for the seller located outside India. The location of the buyer may be in India or outside India. We here in India, receive commission from the seller of the goods for this intermediary service provided to seller of goods.
Question no 1) Whether this commission received is liable to GST?
Question no 2) If Yes, How invoice is to be issued and how tax is to be collected and paid?

ANSWER

Facts of the case: Intermediary services being provided to foreign seller of goods for sale of goods in India and outside India.

Law Applicable:

SECTION 13 of IGST Act -
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:''
               (b) intermediary services;

SECTION 2of IGST Act
(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; or in Indian rupees wherever permitted by the Reserve Bank of India 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;

Interpretation: In case of Intermediary services where the location of Supplier or Recipient is located outside India, the place of supply of service is the location of the Supplier of Services, i.e., of the Intermediary.
In the given case, Place of Supply will be the location of Intermediary, i.e, India. The location of supplier is also in India.
Also, for a supply to be export, all the conditions of Section 2(6) should be fulfilled. As the place of supply is in India therefore the current supply is not Export of Service. Hence GST will be applicable.

For issuance of Invoice, the provisions of Section 31 of CGST Act, 2017 should be taken into consideration.

Conclusion: GST will be applicable on such supply of Intermediary service and invoice should be issued as per the provisions of CGST Act.(Reply dt. 20-02-2020)