Ironical situation – receiving foreign exchange is taxed :
This provision has created an ironical situation. If Indian commission agent provides service to Principal outside India, he is required to pay IGST, though he is receiving payment in foreign exchange. On the other hand, if a foreign commission agent provides service to Indian Principal, the Indian Principal has to pay him in foreign exchange but no IGST is payable.
Thus, a transaction where actually India received foreign exchange is subjected to IGST, while transaction where there is outflow of foreign exchange from India is not subject to IGST.