Case dealing with the question if Indian service provider is taxable in India or not. It concerns promotion and marketing and after sale support services as a composite supply to customers both in and outside India. The service provider argues that his activities are not to be regarded ‘intermediary services’, but pure marketing and promotion services.
The facts show that the service provider is doing somewhat more, that just promoting. He is also negotiating prices, and has a decisive say in whether or not the Principal should conclude or reject or change the contract. Also, the commission payable to the service provider is tied to the amount of sales that he enables, which is typically an agency activity.
Therefore, it is rules that the service provider is not pure and mere promotion and marketing services, but the services provided are “facilitating the supply of goods”, and hence qualify as “intermediary services”.
Source: A2Z TaxCorp
