There are a number of queries on applicability of GST on intermediary services or commonly known as commission. We attempt to solve a few of them.
- Meaning of Intermediary : Section 2(13) of the IGST Act defines Intermediary as 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 on his own account.
- Place of Supply of Service: Section 13(8) of the IGST Act specifies that the place of supply of the following services shall be the location of the supplier of services, namely:-
- Services provided by a banking company, or a financial institution, or a non banking finance company, to account holders;
- Intermediary services;
- services consisting of hiring means of transport, including yatch but excluding aircrafts and vessels, up to a period of one month
HENCE THE PLACE OF PROVISION OF SERVICE FOR INTERMEDIARY SERVICE IS ALWAYS THE LOCATION OF SUPPLIER OF SERVICES.
- Whether intermediary services taxable in India: YES
- If intermediary services provided to a foreign company taxable in India: YES due to Section 13(8) as discussed in Point No.2 even if the money is received in foreign currency
- HSN Code for Commission : 9961