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TMI BlogCenvat Credit of Service Tax paid on Commission to Foreign AgentsX X X X Extracts X X X X X X X X Extracts X X X X ..... Dear Experts, We are a manufacturer of PVC films. We are paying commission to overseas agents on our exports. Excise Department has issued us notice for demand of service tax on commission paid to overseas agents.Can anyone clarify us on below mentioned queries : 1. Commission paid to overseas agents attracts service tax ? 2. Service tax paid on commission to overseas agents can be take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n as cenvat credit to pay excise duty and/or service tax on output services. If yes any notification available. 3. Any exemption available on payment of service tax on commission paid to overseas agents.If yes any notification available. Kindly guide us. - Reply By Sucheta Agrawal - The Reply = Dear Mr. Dharmendra, 1. Ans Yes commission paid to overseas agent come under the catego ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry of Business Auxilliary Services definition and attract service tax. But this service will come under Export of service Rule, Rule 3(1)(iii) and u may claim refund as per the rules prescribed. in the case of Blue Star Ltd v. CCE , (2008 (3) TMI 32 - CESTAT BANGALORE) and some other cases will be applicable in your case. 2. No actually in this case CENVAT Credit not applicable, u may claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the refund only 3. no exemption available, only refund available. - Reply By Allada Ravindra Babu - The Reply = Refer CBEC Circular No. B1/6/2005-TRU dated 27.7.2005 wherein, in para 26, it was clarified that an explanation had been inserted to Section 65 (105) by virtue of which, services provided by a service provider who is situated outside India to a recipient of such service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... who is based in India would be taxable service in the hands of the recipient. From the said circular, it is clear that the earliest point in time when liability in respect of service rendered overseas was sought to be cast upon the recipient, was 16.6.2005 and not prior thereto. Service Tax payable as per Section 66(A) of Finance Act, 2006 (reverse charnge mechanism) The same is not tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eated as output service as per Rule 5 of Taxation of Services Rules , 2006 and is eligible for credit. With Regards, A Ravindra Babu - Reply By sv bhasker - The Reply = Sir, Question1- Yes, under reverse charge mechanism Question-2-Yes, sales commission is an input service as per Rule 2(l) of CCR, 2004 Question-3 exemption is there under Notification No. 18/2009 7/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7/2009 upto 1% of FOB, by follwing the procedure therein. - Reply By P Ovhal - The Reply = I agree with Mr. Bhasker, It better that you can avail Service Tax Exemption under Notification No. 18/2009 Step 1) File form Exp-I to Your juridictional Asst. Commissioner of Service Tax / Central Excise Step 2) File form Exp-II half yearly. - Cenvat Credit of Service Tax paid on Commission t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o Foreign Agents - Query Started By: - dharmendra more Dated:- 26-12-2011 Service Tax - Got 4 Replies - Service Tax - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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