In re Sampurnam Hosieries Impex Private Limited (GST AAR Tamilnadu)
In re Sampurnam Hosieries Impex Private Limited, the Tamil Nadu Authority for Advance Ruling examined the GST implications on commissions and charges paid by an exporter of garments to foreign directors, foreign marketing agents, and foreign clearing and forwarding (C&F) agents.
The applicant sought clarification on three issues: commission payable to a foreign national director for marketing and sourcing orders, commission payable to foreign marketing agents, and charges payable to foreign C&F agents operating abroad. The applicant stated that all activities were taking place outside India.
During the personal hearing, the applicant explained that one of its directors, a Swiss national owning 99% of the company’s shares, would market and source export orders abroad and receive commission at 15% of the invoice value. No separate salary was being paid to him. The applicant also clarified that foreign marketing agents would receive commission at 20% of the invoice value and that foreign C&F agents were engaged in cases involving multiple consignors in a single export shipment.
The Authority first examined whether the questions raised were admissible under Section 97(2) of the CGST Act, 2017. It held that the issues related to determination of liability to pay tax and were therefore maintainable under Section 97(2)(e).
