GST on commission paid to Cross border Directors

The Tamil Nadu Authority for Advance Ruling examined the GST implications of commissions and service charges paid by an Indian garment exporter to foreign directors, overseas marketing agents and foreign clearing and forwarding agents. 

The applicant, an exporter of garments based in Coimbatore, sought clarification regarding GST liability on payments proposed to be made to a foreign director for sourcing export orders, foreign marketing agents and overseas clearing and forwarding agents. 

The Authority held that commission paid to a foreign director and charges paid to foreign clearing and forwarding agents attract GST under reverse charge as import of services, whereas commission paid to overseas marketing agents does not attract GST because such services qualify as intermediary services with the place of supply located outside India.