My client received commission from a foreign company in foreign currency kindly guide from GST and Income Tax perspective.

Reply—As your client is receiving commission from outside India, it must be case of Export of service. Export of service is also considered as inter-state service, therefore registration will be required when aggregate turnover crosses the threshold limit i.e. Rs. twenty lakhs during a financial year.

As per Section 2(6) of IGST Act, 2017, export of services” means the supply of any service when,––

(i) the supplier of service is located in India;

(ii) the recipient of service is located outside India;

(iii) the place of supply of service is outside India;

(iv) the payment for such service has been received by the supplier of service in convertible foreign exchange or in Indian rupees wherever permitted by the Reserve Bank of India and

(v) the supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation 1 in section 8;

If the above conditions are satisfied, service supplied by a taxpayer will covered under Export of service.

The above service will fall under section 16 of the IGST Act, as Zero rated supply and can be made on payment of IGST or without payment of IGST (in case of LUT/Bond).