GST ON BROKERAGE
This query is : Resolved
15 July 2017
Dear Experts,
pls kindly cnfrm me what will be the gst impact on brokerage. If a broker getting brokerage and his turnover not crossing 20 lac than who will gonna pay gst liability....? What is the rate of gst on brokerage services....? If its in under RCM than where we can claim tax amount paid by service recipient....?
15 July 2017
Brokerage GST 18%. If Broker Registered then Broker will charge GST 18% and pay to Govt. If broker unregistered then Recipient of service from broker will pay GST and the Recipient will claim the input on RCM.
VK
VK
15 July 2017
thanx a lot sir
but there is some points raised in compulsory registration.
point is that:-
Persons who supply goods or services on behalf of other taxable persons whether as an agent or otherwise.
kindly give ur suggestion on that.
26 July 2024
Under GST, the supply of goods or services on behalf of other taxable persons, whether as an agent or otherwise, has specific implications regarding the tax liability and compliance requirements. Here’s a detailed overview:
### **1. **Role of Agents in GST**
**a. **Definition and Types of Agents:**
- **Agent:**
- Under GST, an "agent" is defined as a person who, on behalf of another person (principal), undertakes to supply goods or services. This includes scenarios where the agent provides goods or services as an intermediary between the principal and the customer.
- **Types of Agents:**
- **Commission Agents:** Those who facilitate the sale of goods/services and receive a commission.
- **Consignment Agents:** Those who hold goods on consignment and sell them on behalf of the principal.
- **Job Work Agents:** Those who perform processing or manufacturing activities on behalf of another person.
**b. **Taxation of Agents:**
- **Principal-Agent Relationship:**
- When an agent supplies goods or services on behalf of a principal, the principal remains the supplier in terms of GST. The agent's role is to facilitate the supply but does not change the nature of the supply or its taxability.
### **2. **GST Implications for Agents**
**a. **Tax Liability and Collection:**
- **Supply by Agent:**
- The GST liability on the supply of goods or services remains with the principal, but the agent is responsible for charging and collecting GST from the customer, provided the agent is registered under GST.
- **Invoice Issuance:**
- The agent must issue an invoice in the name of the principal, showing the principal’s GSTIN (Goods and Services Tax Identification Number). The invoice should reflect the principal’s details and the applicable GST rate.
**b. **Input Tax Credit (ITC):**
- **Claiming ITC:**
- The principal can claim Input Tax Credit (ITC) on GST paid on inputs and input services used in the supply process. The agent must ensure that the GST charged on supplies is properly accounted for in the GST returns of the principal.
### **3. **Reporting and Compliance**
**a. **Agent’s GST Returns:**
- **Reporting:**
- The agent must report the supplies made on behalf of the principal in their GST returns (GSTR-1 and GSTR-3B). This includes reporting the details of invoices issued on behalf of the principal.
- **GSTR-1:**
- In GSTR-1, the agent reports the outward supplies and GST collected. This includes details of transactions where the agent is acting on behalf of the principal.
- **GSTR-3B:**
- The agent includes the GST liability in GSTR-3B, ensuring that GST collected on behalf of the principal is accurately reported and paid.
**b. **Principal’s GST Returns:**
- **Invoice from Agent:**
- The principal should also keep track of the invoices issued by the agent. The principal’s GST returns should reflect the ITC claims based on the GST details provided by the agent.
### **4. **Example Scenarios**
**a. **Commission Agents:**
- **Scenario:**
- A commission agent sells goods on behalf of a manufacturer. The agent issues an invoice in the manufacturer’s name, charging GST based on the manufacturer's GSTIN.
- **GST Treatment:**
- The agent’s commission is subject to GST, and the principal (manufacturer) is liable for GST on the sale. The agent charges GST on their commission and reports this in their GST returns.
**b. **Consignment Agents:**
- **Scenario:**
- A consignment agent holds and sells goods on behalf of the manufacturer. The agent issues invoices in the manufacturer’s name.
- **GST Treatment:**
- GST is charged on the sale of goods based on the manufacturer’s GSTIN. The consignment agent reports the sale and GST collected on behalf of the manufacturer.
### **5. **Summary**
- **Agents must issue invoices in the principal’s name, showing the principal’s GSTIN.**
- **GST on supplies made by the agent is the responsibility of the principal.**
- **Agents must report and pay GST on their commission or service fees.**
- **Principal can claim ITC on GST paid through the agent.**
Understanding these aspects helps ensure compliance with GST regulations for both agents and principals. For more detailed guidance based on specific scenarios, consulting with a GST expert or tax advisor is recommended.
### **1. **Role of Agents in GST**
**a. **Definition and Types of Agents:**
- **Agent:**
- Under GST, an "agent" is defined as a person who, on behalf of another person (principal), undertakes to supply goods or services. This includes scenarios where the agent provides goods or services as an intermediary between the principal and the customer.
- **Types of Agents:**
- **Commission Agents:** Those who facilitate the sale of goods/services and receive a commission.
- **Consignment Agents:** Those who hold goods on consignment and sell them on behalf of the principal.
- **Job Work Agents:** Those who perform processing or manufacturing activities on behalf of another person.
**b. **Taxation of Agents:**
- **Principal-Agent Relationship:**
- When an agent supplies goods or services on behalf of a principal, the principal remains the supplier in terms of GST. The agent's role is to facilitate the supply but does not change the nature of the supply or its taxability.
### **2. **GST Implications for Agents**
**a. **Tax Liability and Collection:**
- **Supply by Agent:**
- The GST liability on the supply of goods or services remains with the principal, but the agent is responsible for charging and collecting GST from the customer, provided the agent is registered under GST.
- **Invoice Issuance:**
- The agent must issue an invoice in the name of the principal, showing the principal’s GSTIN (Goods and Services Tax Identification Number). The invoice should reflect the principal’s details and the applicable GST rate.
**b. **Input Tax Credit (ITC):**
- **Claiming ITC:**
- The principal can claim Input Tax Credit (ITC) on GST paid on inputs and input services used in the supply process. The agent must ensure that the GST charged on supplies is properly accounted for in the GST returns of the principal.
### **3. **Reporting and Compliance**
**a. **Agent’s GST Returns:**
- **Reporting:**
- The agent must report the supplies made on behalf of the principal in their GST returns (GSTR-1 and GSTR-3B). This includes reporting the details of invoices issued on behalf of the principal.
- **GSTR-1:**
- In GSTR-1, the agent reports the outward supplies and GST collected. This includes details of transactions where the agent is acting on behalf of the principal.
- **GSTR-3B:**
- The agent includes the GST liability in GSTR-3B, ensuring that GST collected on behalf of the principal is accurately reported and paid.
**b. **Principal’s GST Returns:**
- **Invoice from Agent:**
- The principal should also keep track of the invoices issued by the agent. The principal’s GST returns should reflect the ITC claims based on the GST details provided by the agent.
### **4. **Example Scenarios**
**a. **Commission Agents:**
- **Scenario:**
- A commission agent sells goods on behalf of a manufacturer. The agent issues an invoice in the manufacturer’s name, charging GST based on the manufacturer's GSTIN.
- **GST Treatment:**
- The agent’s commission is subject to GST, and the principal (manufacturer) is liable for GST on the sale. The agent charges GST on their commission and reports this in their GST returns.
**b. **Consignment Agents:**
- **Scenario:**
- A consignment agent holds and sells goods on behalf of the manufacturer. The agent issues invoices in the manufacturer’s name.
- **GST Treatment:**
- GST is charged on the sale of goods based on the manufacturer’s GSTIN. The consignment agent reports the sale and GST collected on behalf of the manufacturer.
### **5. **Summary**
- **Agents must issue invoices in the principal’s name, showing the principal’s GSTIN.**
- **GST on supplies made by the agent is the responsibility of the principal.**
- **Agents must report and pay GST on their commission or service fees.**
- **Principal can claim ITC on GST paid through the agent.**
Understanding these aspects helps ensure compliance with GST regulations for both agents and principals. For more detailed guidance based on specific scenarios, consulting with a GST expert or tax advisor is recommended.
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