COMMISSION COLLECTION PROTOCOL

Standard Operating Procedure for Trade Facilitators

Facilitator / Agent: _____________________________________________

Principal: _____________________________________________

Mandate Reference: _____________________________________________

Commission Rate: ______% of _____________

Protocol Version: _____________________________________________

Effective Date: _____________________________________________

This Protocol establishes the standard procedure for calculating, invoicing, tracking, and collecting commissions earned under trade facilitation mandates. It applies to all commission-only arrangements between All Frontier Global Nexus and its Principals. Adherence to this Protocol ensures timely collection, clean records, and protection of commission rights throughout the tail period.

SECTION 1 — COMMISSION TRIGGER EVENTS

A commission becomes due and payable upon the occurrence of the agreed Commission Trigger Event as defined in the mandate agreement. The following are the standard trigger events used in All Frontier Global Nexus mandates:

Standard trigger for All Frontier Global Nexus mandates: T1 (Receipt of Payment) is the default trigger unless the mandate agreement specifies otherwise. This ensures commission is only due when the Principal has actually been paid — aligning the facilitator's interest with the Principal's commercial success.

SECTION 2 — COMMISSION CALCULATION

2.1 Calculation Base

Commission is calculated on the agreed base value as specified in the mandate agreement:

2.2 Calculation Formula

Commission Amount = Base Value × Commission Rate (%)

Example: FOB value of EUR 150,000 at a commission rate of 3% = EUR 4,500 commission due.

2.3 Currency

Commission is invoiced and payable in the currency of the underlying transaction unless the mandate agreement specifies otherwise. Where the underlying transaction is in USD or EUR, the commission invoice is in the same currency. Where the Principal is an Indian entity paying in INR, the commission may be invoiced in INR at the prevailing RBI reference rate on the invoice date.

2.4 Repeat Orders Within Tail Period

Commission is payable on every transaction between the Principal and the Introduced Party that occurs within the tail period (typically 24 months from the date of introduction), regardless of whether the facilitator is actively involved in the subsequent transaction. Each new purchase order, shipment, or invoice within the tail period triggers a commission calculation on that transaction's base value.

SECTION 3 — COMMISSION INVOICE PREPARATION

A commission invoice must be prepared and issued promptly upon the occurrence of the commission trigger event. The following fields are mandatory on every commission invoice:

SECTION 4 — COMMISSION TRACKING REGISTER

Every commission earned must be recorded in the commission tracking register. Maintain one register per mandate. Update immediately on each commission trigger event.

SECTION 5 — COLLECTION PROCEDURE AND ESCALATION

5.1 Normal Collection

Issue commission invoice within 7 days of trigger event.

Follow up by email or WhatsApp on Day 15 if payment not received — polite payment reminder referencing invoice number and due date.

Second follow-up on Day 30 — formal written reminder. Request confirmation of payment date.

Day 45 — if still unpaid, escalate to senior relationship manager. Direct call with Principal's finance director.

Day 60 — formal letter before action: written notice referencing mandate agreement, commission amount outstanding, accrued interest (if interest clause in agreement), and intention to pursue formal remedies if not paid within 14 days.

5.2 Dispute Resolution

If the Principal disputes the commission invoice — whether on grounds of trigger event, calculation, or mandate scope — the following procedure applies:

Written dispute notice: Principal must raise any dispute in writing within 14 days of receiving the commission invoice. Verbal disputes are not recognised.

Internal review: Facilitator reviews the dispute against the mandate agreement and deal register. Response issued within 14 days of dispute notice.

Escalation: If dispute is not resolved within 30 days of the dispute notice — escalate to the dispute resolution mechanism specified in the mandate agreement (negotiation → mediation → arbitration or court as agreed).

Partial payment: If part of the commission is not in dispute, the undisputed amount must be paid by the due date. Dispute only suspends payment of the genuinely disputed portion.

5.3 Circumvention

If the Principal concludes a transaction with the Introduced Party without involving the facilitator and without paying the agreed commission — and this transaction occurs within the tail period — this constitutes circumvention under the NCNDA and mandate agreement. The facilitator must:

Obtain evidence of the circumventing transaction — shipping records, trade databases, buyer confirmation, or other documentary evidence.

Issue a formal circumvention notice to the Principal in writing — citing the NCNDA provisions, the specific transaction, and the commission amount claimed.

Pursue recovery through the agreed dispute resolution mechanism — arbitration is strongly preferred for international circumvention claims as it produces an enforceable award across jurisdictions.

SECTION 6 — FEMA AND TAX COMPLIANCE FOR COMMISSION RECEIPTS

Foreign currency commission receipts (from non-resident Principals paying in USD, EUR, or GBP) are foreign exchange inflows subject to FEMA. The commission must be received through an Authorised Dealer bank.

FIRC (Foreign Inward Remittance Certificate): Obtain FIRC from the AD bank for each foreign currency commission receipt — essential for FEMA compliance and GST export service documentation.

GST on commission: Export of services (trade facilitation services rendered to a foreign Principal) is zero-rated under GST if: (a) the place of supply is outside India; (b) payment is received in convertible foreign exchange. Confirm zero-rating with GST adviser before raising invoices.

TDS (Tax Deducted at Source): Indian Principals paying commission to the facilitator may deduct TDS at applicable rates (typically 10% under Section 194H of the Income Tax Act for commission income). Ensure TDS credit is reflected in Form 26AS and claimed in tax return.

Income tax: Commission income is taxable in India as business income (Schedule BP) — maintain proper accounts and file returns accordingly.

SECTION 7 — COMMISSION COLLECTION CHECKLIST (PER TRANSACTION)

Doc 89 — Commission Collection Protocol — Neutral Template