Taxability of Export Commission paid to Non-resident has always been a question. It looks non-taxable transaction when commission is paid to a person residing outside India and selling goods of Indian exporter outside India without having significant economic presence in India, however actual position is not as simple as we think.
We need to look various limbs of the Provision of the Income tax act. These are:
– Whether he has significant economic presence in India?
– Provision of DTAAs
– Whether income is accruing and arising in India?
– Whether income is deemed to accruing and arising in India?
– Whether Export commission comes under the definition of Managerial services?
– Whether Export commission can be considered as Fees for Technical Services?
– Whether Export commission comes under the definition of professional services?
Generally Income tax authority seek to tax the export commission as FTS. But It is a question of law that whether export commission is indeed a FTS and taxable in India?
