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Zenith Marketing Ltd., located in Mumbai, acts as an intermediary / broker connecting foreign software buyers located in London with software developers in Bengaluru. For arranging the supply, Zenith receives a 10% commission in convertible foreign exchange from the London client. What is the Place of Supply and GST liability for Zenith Marketing Ltd.?

Select Your Answer (Keyboard: A, B, C, D)
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Correct Answer

✅ Option B — Place of supply is Mumbai (location of supplier); subject to CGST + SGST at 18%

All Options:

  • APlace of supply is London (outside India); it qualifies as zero-rated export of service
  • BPlace of supply is Mumbai (location of supplier); subject to CGST + SGST at 18% ✓
  • CPlace of supply is Bengaluru (location of developer); subject to IGST at 18%
  • DPlace of supply is London; but since commission is received in forex, it is exempt by notification

Detailed Solution & Explanation

Analysis under the IGST Act, 2017:
1. Zenith Marketing Ltd. acts as an **intermediary** as defined in Section 2(13) of the IGST Act.
2. Under **Section 13(8)(b)** of the IGST Act, where either the supplier or recipient is located outside India, the Place of Supply for intermediary services is:
Place of Supply=Location of the Supplier of Services=Mumbai (Maharashtra)\displaystyle \text{Place of Supply} = \text{Location of the Supplier of Services} = Mumbai (Maharashtra)\displaystyle \text{Mumbai (Maharashtra)}
3. Because the place of supply is within India (Mumbai) and not outside India, condition (iii) of Section 2(6) for 'export of services' is not satisfied. Thus, it cannot be treated as an export.
4. Since location of supplier (Mumbai) and place of supply (Mumbai) are in the same State, it is an **intra-state supply** liable to CGST and SGST.
Hence, **Option B** is the correct answer.

Key Concepts to Understand

Supply

Total amount of a good available to consumers.

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