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Where commission is paid by the Indian buyers directly to the
appellant instead of the commission alongwith price being first remitted
to the foreign supplier and then the foreign supplier remitting the
commission amount, such direct receipts are deemed to be receipts in
foreign exchange.
Facts
The appellant used to find
buyers in India for the products of a foreign company. The Indian buyers
made payments directly to the foreign seller and the foreign seller
paid commission to the appellant. In some cases buyers opted to pay the
commission directly to the appellant and in such cases commission part
shown in the invoice was not paid on to the seller by the buyer. The
Commissioner (Appeals) held that the service was delivered in India even
though the commission was received from foreign supplier and therefore,
it will not be tantamount to export of service and upheld the primary
order. Aggrieved by the same, the present appeal is filed.
Held
The
Tribunal held that in case of the commission received from foreign
supplier, the service rendered clearly satisfies the requirement of
export of service as has been held in the case of Paul Merchants Limited
vs. CCE, Chandigarh [2013 (29) STR 267 (Tri.-Del). Even in the other
situation where the commission is paid by the Indian buyers to the
appellant, in effect, the commission was paid on behalf of the foreign
supplier only and can be deemed to have been paid in foreign exchange as
the buyers would have had to remit the commission part also to the
foreign supplier who would have in turn sent it to the appellant and
thus this arrangement makes the procedure simple. Further, relying on
the judgement of the Supreme Court in the case of J. B. Boda – 1997
(229) ITR 271 (SC), where such payments are deemed to be received in
foreign exchange the appeal is allowed.
